emv secure chip on credit card

The United States is in the midst of a transition to EMV chip card technology that will have a lasting impact on consumers, retailers, issuing banks and payment processing providers.

EMV is a global standard for credit and debit cards that’s based on microchip technology that was developed over 20 years ago as a joint effort between Europay, MasterCard® and Visa® (hence the acronym EMV) to facilitate worldwide interoperability and acceptance of secure payment transactions.

The U.S. is finally catching up with the rest of the world by adopting EMV. Official figures released in mid-2015 by EMVCo (EMV’s managing consortium) reveal that there were more than 3.4 billion EMV payment cards in circulation worldwide at the end of 2014. The percentage of EMV chip transactions was highest in Europe, where they accounted for nearly 97 percent of card-present payments, while the figure was over 85 percent in Canada, Latin America and the Caribbean, and 80 percent in Africa and the Middle East. As chip cards become more widely circulated in the United States, TransFirst® will continue to assist its merchants with transitioning to EMV.


EMV cards — also referred to as chip cards or smartcards — are manufactured with an embedded microprocessor (microchip), a type of mini-computer that offers stronger security features and other capabilities not available on the magnetic stripe cards that have been the standard in the U.S. for half a century. The chip stores information securely and performs cryptographic processing that keeps the data safe from fraudsters and identity thieves.

There are two basic types of chip card technology: contact chip, which requires physical contact with a card reader to exchange data with the terminal, and contactless, which relies on an exchange of data via radio frequency (also known as near-field communication, or NFC ).

EMV cards are issued in one of two versions, either chip-and-signature or chip-and-PIN. In the U.S., most newly-issued chip cards require a signature to complete the transaction at the point of sale. Issuing banks have indicated that they will eventually transition cardholder to chip-and-PIN cards, which already account for the majority of EMV cards in use worldwide.

The two versions differ in how they are authenticated at the point of sale. The cardholder begins by sliding or “dipping” the card into the bottom of the terminal where the card reader communicates with and collects data from the embedded microchip. Chip-and-PIN cardholders must then enter a four-digit personal identification number (PIN) to complete the transaction. Chip-and-signature (or chip-and-sig for short) cardholders must sign the receipt to complete the sale.

Switching to EMV

Transitioning to EMV technology in the U.S. will have several distinct advantages for all parties involved:

  • EMV cards are considered much more secure against credit card fraud than mag stripe cards because more information can be stored on the chip than on the mag stripe, enhancing cardholder verification methods.
  • EMV chips generate a unique code for each individual transaction that cannot be used again, rendering any stolen transaction information useless to thieves. 
  • EMV reduces chargebacks due to fraudulent or stolen cards, saving merchants time and money.
  • EMV cards create a common cardholder experience because they are accepted worldwide, unlike mag stripe cards.
  • EMV helps support contactless transactions (NFC), the “tap-and-go” technology that is the basis for digital wallets.

Major banks and credit unions have been issuing EMV chip cards to their customers since 2014, and in early 2015 U.S. government agencies began shifting to chip-and-PIN cards under presidential executive order.

For the foreseeable future, EMV cards issued in the U.S. will continue to come equipped with a mag stripe, and the system will be able to process both mag stripe and chip cards. The complete switchover to EMV is expected to take five years or more.

In October 2015, the liability for magnetic stripe fraud shifted to the party to the transaction that does not support EMV, which is why it is important for retailers and service providers to become EMV compatible. The liability shift for organizations that sell fuel is October 2017.

Early Adopters

Savvy merchants will be early adopters of EMV technology, embracing the new technology and profiting from being able to accept all forms of payment cards and advanced credit card processing options.

A trained TransFirst representative can answer your specific questions about EMV and general questions about setting up a merchant account that allows you to accept smartcards. Complete the form on this page and we’ll respond quickly to your inquiry.

EMV is a registered trademark or trademark of EMVCO LLC in the United States and other countries. www.emvco.com

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