Credit and debit cards with embedded microchips have finally begun to become widely available in the US and according to Visa, they have already prevented a great deal of fraud with some large merchants seeing an 18 per cent decrease in counterfeit transactions.
The company noted that 25 merchants had suffered heavily from fraud in 2014. Five of them decided to begin processing credit and debit cards equipped with EMV (Europay, MasterCard and Visa) technology and this led to an 18.3 per cent decrease in fraud. Another five of those merchants did not have the necessary equipment to utilise chip-enabled cards and as a result they saw a 11.4 per cent increase in fraudulent transactions.
So far US sellers who have started processing orders using EMV technology have been satisfied with how the chips embedded in the cards have decreased the number of fraudulent transactions that their businesses have to deal with.
This technology is actually quite popular in other parts of the world including Brazil, Europe and Asia due to the increased security it provides when compared to a magnetic stripe and a signature. The cards are harder to counterfeit and they generate a unique code for each transaction made.
Visa and MasterCard have been working with businesses and consumers to help increase the rollout of chip-enabled cards and the terminals that are required to read them. Visa has already issued around 265 million chip enabled credit and debit cards in the US which makes it the biggest market for EMV technology. 70 per cent of MasterCard's consumer credit cards are equipped with chips and this is a 50 per cent increase from October of 2015.
Visa is also planning a software upgrade that will speed up the process of paying with a chip-enabled card considerably. The company's 'Quick Chip” will allow consumers to dip the chip of their cards into a terminal and be able to withdraw the card within two seconds or less. They will no longer have to wait for the purchase to be authorised and, in a world where contactless payments are becoming increasingly common, this feature could help entice consumers on the fence about using a chip-embedded card.
EMV technology has done an excellent job of upgrading credit and debit cards to a point where they are more secure and will become even quicker to use for payments.