Skip to main content

EMV Chip Cards Versus Magnetic Stripe Cards: Why the Change?

June 30, 2016

In our data-driven day and age, personal information is in perpetual circulation. Maintaining optimal security is a growing concern as technology progresses, but advancements are continually being made to counter potential threats. When it comes to debit cards, EMV Chip Cards are the financial industry’s response to prevalent issues associated with card fraud and data breaches.

Though chip technology was first developed back in 1992, the U.S. has just recently begun adopting EMV Chip Cards as the new industry standard. EMV stands for Europay, MasterCard and Visa - the three organizations that originally paved the way for this innovation. EMV Chip Cards are produced with an embedded microchip that securely houses account data. Traditionally, the magnetic stripe on the back of cards contained this information, but the fixed data stored there can be skimmed and replicated. The key difference with EMV Chip Cards is that the microchips generate new, non-reusable transaction codes with each use. Even if data was compromised during a transaction, it would be irrelevant for the next transaction, making the stolen data useless to thieves. Currently, cards are being produced with both magnetic stripes and microchips so that consumers can use their cards at both chip-enabled readers and traditional readers. Eventually, the magnetic stripe will be obsolete and all readers will accept EMV Chip Cards.

To keep the progression moving forward, soft deadlines are in place. Once each deadline passes, fraud liability falls on the merchant or financial institution. As of October 1, 2015, merchants and financial institutions were encouraged to have technology in place to process chip purchases. October 1, 2016 is the target date for ATMs to accept EMV MasterCard, and October 1, 2017 is the soft deadline for ATMs to accept EMV Visa cards.

While this new technology provides enhanced security to consumers paying with cards in-person, the risks associated with online fraud remain the same. Practicing identity theft prevention strategies is important to maintaining security. Always ensure your internet connection is secure, change passwords habitually and report lost or stolen cards immediately. Despite the obstacles created by protection measures, fraudsters will continually look for new ways to compromise information. Stolen cards can still provide thieves with unwarranted access to your accounts. Stay alert and use caution whenever account numbers or personal information are part of the equation.

As an additional protective measure, more financial institutions are now offering capabilities to conveniently turn debit cards on and off through their mobile banking app. If your financial institution offers this service, you can easily turn your card off and on at will to reduce your risk of fraud.

If you have not yet received your new EMV Chip Card you can expect to have it in the coming months. Once your new card is activated, you will enjoy a whole new level of security when making purchases or utilizing ATMs. Contact your local financial institution if you have any questions regarding this transition or about other ways to safeguard your personal information.

James Oosterman is the Vice President of Melrose Bank. He can be reached by telephone 781-665-2500, online at or on Facebook at

« Back to Articles

View More Articles

Discover everything we can offer.