Thought you knew how to work a debit card? Think again.

Thought you knew how to work a debit card?  Think again.


Thought you knew how to use a debit card?  We’ll the rules are turning upside down with banks starting to issue the new EMV card technology.   EMV stands for Europay, Mastercard, Visa because the system has been in place for years in Europe.  Good to know the US is finally catching up!  


All previous debit cards had something called a magstripe on the back that contained all the card information.  Magstripe information can easily be taken and replicated.  Maybe you recall all those massive data breaches at large retailers?  If you were one of the unlucky victims, your bank most likely replaced your card and you had to go through the inconvenience of waiting for it in the mail.


What’s so much better about the new EMV cards?

These new EMV cards have a chip embedded in them, with all the new security,  that is supposed to virtually eliminate the millions lost yearly in card present fraud.


Chip and PIN, or Chip and Signature?

Using a magstripe card today, YOU can choose to use the card as a PIN purchase or sign your name in a SIGNATURE purchase.  With EMV cards, BANKS will choose which method is hardcoded into the card. Chip and PIN versus Chip and Signature.   Since banks make more interchange fees from signature purchases, you can bet your EMV cards will be Chip and Signature.  


Many banks have already started reissuing these new Chip and Signature cards, but still include the magstripe on the back because most merchant terminals are not set-up yet to use the new chip technology. You may have an EMV Chip card already, but have just been using it as always because the magstripe on the back hasn’t forced you to change.


But that’s all going to change October 15, 2015.

That’s the date a liability shift takes place to make merchants more responsible for fraud if their terminals can’t accept an EMV card.  You can bet merchants are going to be installing all those new EMV enabled terminals and require you to start using them pretty quick!  


How do I use an EMV card to make a purchase?

With a magstripe card there was a quick, smooth card swipe so the magstripe could be read with the reading and transaction approval taking place quickly.  


EMV cards are processed in the same two steps, card reading and transaction approval, but with EMV cards you’ll have to start something called “card dipping”.   The card will be dipped into a merchant’s terminal and remain while data flows between the card chip and the bank to verify the card's authenticity and approve the transaction.  A quick swipe would probably deny the transaction.  


So it will take you longer to make an EMV purchase.

Whether you’ll need to enter your PIN or sign your name depends on the option your bank chooses.  Either way, it’s going to take longer to make an EMV purchase.  


But there is hope on speed

Many of the new EMV cards are being issued with Near Field Communication (NFC) technology where if a merchant terminal is enabled, you can tap and go. Realistically though. widespread adoption of that technology is probably years away.


So for all those who have mastered the quick and perfect card swipe required today, your days of glory are coming to a slow end.  Don’t shoot the messenger, or in this case, the banker.


BankerXI’m Banker X and I’m on your side.  I'm a banking industry insider on a mission to help people with money savings ideas and money making ideas through articles and real life stories.   If you liked this post, please share it with friends and like me on Facebook.