Defeating the Skimmer: Why Chip Cards Are the New, More Secure Way to Pay

by Guest Author on June 21, 2017

in Articles, Guest Posts

Did you know the magnetic stripe on your credit card is made using technology that first emerged in the 1950s? Because it’s been around for so long, criminals have become experts at stealing the valuable information stored in that stripe. No wonder vendors worldwide are replacing swipe cards with the modern EMV (Europay, MasterCard, and Visa) chip card!

In 2015, credit card companies in the US set a deadline for merchants to transition to this technology, following Europe and Canada in an attempt to find greater credit card security. Currently in the US, chip cards are still being phased in and merchants are replacing swipe readers with dual chip/swipe readers. However, questions remain about this new-to-us technology and its perceived benefits.

How is the EMV card safer?

Magnetic stripes use the same technology as cassette tapes. Each stripe contains static numeric information that a standard card reader uses to complete the transaction. A chip card contains a microcomputer with similar data, but each transaction uses an encrypted token instead of disclosing your actual account information, keeping your information safe in case of a storewide network breach. In comparison with the cassette-tape features of the stripe card, it delivers an equivalent of “the computing power that put the first man on the moon.” Chip cards are almost impossible to clone, thereby defeating the skimmer, which identity thieves often use to steal your information.

Visa’s U.S. Chip Card Update says “counterfeit fraud dropped 47 percent in May” compared to the same month last year. MasterCard reported a similar decrease, along with a 77 percent increase of fraud among “merchants who have not yet moved to EMV,” said Sienna Kossman of With these statistics heavily favoring the EMV card, cooperation between card companies and merchants is well underway.

In what ways can my chip card information still be stolen?

EMV cards are not foolproof. In an article about growing EMV fraud, the Washington Times said, “U.S. chip cards are vulnerable because they also employ magnetic stripes so that businesses that have not yet made the transition to EMV technology can still access users’ credit data. Thieves can easily exploit magnetic-stripe security weaknesses to counterfeit credit cards by using someone else’s personal information.” Until the stripe is phased out, chip cards are still vulnerable when using the swipe option at checkout.

Chip cards also don’t stop the stolen credit card number problem. Criminals are still able to use a stolen credit card or credit card numbers on Internet purchases, so continue to keep your cards safe!

What is the future of the chip card?

The US is 10 years behind Europe in its EMV implementation. A staggering report from EMV Connection says 47 percent of all credit card fraud occurs in the US due to the lack of full conversion to the EMV card. The report says the UK has seen a 72 percent drop in fraud since their 2004 implementation of EMV cards, and Canada has seen a 48 percent drop from 2011 to 2013.

The US is racing to catch up. Credit card companies, banks, and merchants recently started picking up momentum. None of them want to be left behind and blamed for fraud that could be prevented using EMV technology. By the end of 2019, credit card companies hope to abolish the magnetic stripe crutch our hybrid cards have and be fully chip-oriented. Global use and borderless law enforcement for credit card fraud is just around the corner.

Guest article written by: Anderson Technologies is an IT company providing a variety of IT services and support to St. Louis area businesses, including data recovery services. We can help you devise an IT security plan to give you cybersecurity peace of mind. Contact us today to find out what Anderson Technologies can do for you.

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