EMV Credit Cards - The Difference between a Chip, Pin and Magnetic (Signature) Strip
Chip-and-PIN credit cards
Chip-and-PIN credit cards have integrated circuits—a microchip—embedded in the card itself. In a chip-and-PIN credit card transaction, the cashier or customer inserts the card into a compatible EMV card reader. The chip on the credit card generates a transaction code only eligible for a single transaction. You then enter your associated PIN to prove that you're the card holder. At this point, the purchase authorization completes and the transaction is considered valid.
Chip-and-signature credit cards
Chip-and-signature cards allow you to verify your identity with a signature and are the most popular method in the U.S. due to low cost and ease of use. These cards have the same chip as the chip-and-PIN cards, but they don't use a PIN for identity verification. Instead, you provide a signature to prove your identity. Because it’s more difficult to replicate a PIN than a signature, chip-and-PIN cards are thought to be more secure than chip-and-signature cards.3
Magnetic strip credit cards
Magnetic strip credit cards make up the majority of credit cards in the U.S., but are quickly being replaced and updated due to an October 2015 deadline for EMV adoption which was created by major U.S. credit card issuers.
EMV adoption in the U.S. should decrease credit card fraud related to counterfeit magnetic strip cards, but perhaps not as dramatically as in Europe due to the use of signature instead of PIN. 2
Stay informed and be empowered with knowledge to guard against credit care fraud.
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