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What Are EMV Chips and Do They Make Credit Cards More Secure?

Chip technology makes credit card theft more difficult. EMV chips create a unique key each time you use your card.

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You may have noticed that most card readers at your local grocery or retail store ask you to insert -- instead of swipe -- a credit card now. Many retailers and businesses are also providing contactless payments, which involves tapping your card on a reader to complete a transaction. As credit card chips become the standard, the days of swiping may soon be over. 

Known as EMV chip cards or chip-and-PIN cards, these cards are embedded with a small gold- or silver-colored microchip to securely manage your transactions. The security built into this chip makes it harder to copy the information stored on the credit card, offering a safer alternative to traditional magnetic-swipe cards. In fact, credit cards with chips have reduced card-present counterfeit payment fraud by 76% from 2015 to 2018, according to Visa. 

You probably already have at least one card with a chip, if not more. If you don’t, you may want to ask your credit card issuers to replace your magnetic-stripe cards with chip-and-PIN cards.

What are EMV chips? 

EMV stands for Europay, Visa and Mastercard. Although US companies frequently adopt technology ahead of the rest of the world, EMV chips were first used in Europe as early as 1986, and credit cards with chips didn’t take off in the US until the mid-2010s

That’s in large part because Mastercard and Visa set a deadline of Oct. 1, 2015 for all US credit card issuers to replace magnetic-stripe cards with credit cards chips. As an incentive to transition to EMV chip cards, fraud liability would shift to the bank or merchant that did not make the change by that date. By the end of 2020, nearly 73% of all card transactions made in the US used EMV chip technology, and 75% of US stores were accepting credit cards with chips. (For comparison, more than 99% of the transactions in Europe are with chip cards.)

EMV has become a global standard in more than 80 countries, according to Jason Bohrer, executive director of the US Payments Forum, a nonprofit organization that supports the payment industry. “The standard defines how cards are authenticated using cryptograms, unique transaction data and other techniques to protect against counterfeit cards,” Bohrer said. “It also defines other security practices such as how cardholders are verified and transactions authorized.”

How do credit card chips work? 

To use a chip card, you insert your card into a card reader (often referred to as “dipping” your card) and then follow the instructions to complete the transaction. 

According to Bohrer, the way chip cards secure transaction information makes it difficult for thieves to steal or counterfeit the cards. With each transaction, the chip card creates a unique key, so even if a thief does steal that key, it is valid just for that one transaction. “Chip card transactions provide advanced security in-store and at the ATM by making every transaction unique. And if the card data and the one-time code are stolen, the information cannot be used to create counterfeit cards and commit fraud,” he explained.

Types of EMV cards

EMV cards originally came in two styles: chip-and-signature, or chip-and-PIN. 

As you could guess, the chip-and-signature method required you to sign to authorize the transaction. Chip-and-PIN cards added an additional layer of security by requiring you to enter a PIN code to verify your identity. That makes the chip-and-PIN method the more secure of the two since signatures can be forged. 

However, chip-and-signature EMV cards often no longer require a signature. Credit card companies formerly used your signature to confirm your identity, which was helpful if your card was stolen. However, now you can freeze your card if it’s lost or stolen, and electronic card-readers can recognize if a card has been frozen or reported stolen. You might still sign when you use a chip card depending on the merchant’s policies or point-of-sale technology. You might also sign when you dine at restaurants so you can add a tip to your total.

How to protect yourself from credit card fraud

While chip credit cards have caused a significant drop in fraud, they’re not completely foolproof. To keep safe, cardholders should take measures to protect themselves against card fraud in a few ways.

First, order a chip-and-PIN card

If you don’t already have a chip-and-PIN credit card, see if you can request one from your credit card company. If your credit card company can’t provide you with one, consider using a different credit card with better security.  

Don’t hand your card over

EMV chip cards are safer because the chip credit card doesn’t need to be handed over to a cashier. Insert the credit card yourself into the card reader, and follow the prompts to complete the sale while keeping your card in your possession.

Avoid swiping

By the end of 2020, nearly three-quarters of all credit card transactions in the US used EMV chip cards. However, you may run across a business that is holding out from moving to chip-card readers. If you can help it, avoid card readers that require you to swipe instead of inserting, or dipping, your card into the reader. 

If you have no other option, inspect the card reader carefully. Skimming is a danger associated with magnetic stripe cards where thieves place a fraudulent card reader over a legitimate one to steal the information on your magnetic stripe and then duplicate it. If the card reader, such as one at a gas pump or ATM, looks loose, poorly anchored or like it’s been tampered with, don’t swipe.

Order a credit freeze in case of identity theft

If you worry that your personal and financial information has been stolen off your cards, you can take another step to guard your privacy by freezing your credit. When you freeze your credit, creditors, companies and individuals will be unable to view your credit file or open a new line of credit in your name. Freezing your credit is free. Plus, you can freeze and unfreeze your credit for set periods of time to allow (or block) access to your credit reports. You can also choose to have your credit monitored and receive alerts if someone tries to use your information fraudulently.

Do all retailers accept EMV cards?

While most retailers use EMV card readers, some types of businesses are slow to switch over and are still vulnerable to card fraud because of card skimming. 

For example, at gas stations, switching to EMV-ready terminals can be costly because the card reader is integrated into the gas pump itself. Because of the additions, credit card companies gave gas stations and convenience stores a deadline of April 2021 to comply. However, less than half made the April deadline, despite the fact that liability has now shifted from the card issuers to them.  

Contactless transactions

Chip cards may still feel relatively new in the US, and the next step in using them is already here: contactless payments. This involves tapping your card (or phone or smart watch) on a reader to complete a transaction.

This new payment method uses NFC, or near field communication, to communicate with a reader a couple of inches away. EMV chips can be read without having to be dipped into a credit card reader with NFC technology. Apple Pay is another good example of NFC at work. You use your phone’s passcode, facial recognition or fingerprint reader ID to secure the transaction. 

Dipping or contactless: Which is safer?

Because both dipping your chip card into a reader and tapping your chip card use the same underlying EMV security protections, both are secure ways to make a transaction.

According to Bohrer, whether you’re dipping or tapping for in-person transactions, you’ve already reduced the likelihood of card fraud significantly. “All EMV payments, whether contactless or with contact, are secure,” he said.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.

Cynthia Paez Bowman is a finance, real estate and international business journalist. Besides, her work has been featured in Business Jet Traveler, MSN,, and She owns and operates a small digital marketing and public relations firm that works with select startups and women-owned businesses to provide growth and visibility. Cynthia splits her time between Los Angeles, CA and San Sebastian, Spain. She travels to Africa and the Middle East regularly to consult with women's NGOs about small business development.
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