The Future of Credit Cards
Shoppers who have been to Europe recently, or who have been in tourist areas of the US, may have already spotted a new kind of credit card reader. In addition to the traditional magnetic stripe reader, two new sensors have been introduced. A new slot is available for credit cards with an EMV chip. A new pad is also available for tap and go payment. These new sensors have been tested in Europe for the past couple of years, and they could soon replace traditional credit cards.
The EMV chip is named by the companies that are developing the technology: EuroPay, MasterCard and Visa, although MasterCard actually bought EuroPay in 2002. Since the 1990s, EMV has replaced magnetic stripe technology in most of the developed world outside of the US.
EMV technology stores credit card data on a microchip inside of the credit card. Instead of providing the raw account information, as the magnetic stripes do, the EMV chip uses a more secure validation code. The older EMVs are simply inserted into a reader, rather than swiped.
The same EMV format has now been adapted for a contactless reader. These new readers can be taped against the reader or waved near it without needing to insert or swipe the card. The message is instead transmitted by a radio signal from a chip called an RFID.
In addition to all of this, cell phone technology has advanced to the point that some mobiles are capable of mimicking the radio signal of an RFID, allowing you to make credit card purchases using your cell phone as though it were a touch and go credit card.
The primary credit card vendors are currently hoping to make the EMV chip a virtual requirement in order to make credit or debit card payments. The MasterCard version is called PayPass. They plan to implement contactless cards and mobile applications. VISAs version will be known as PayWave. They have been experimenting with using the same technology as a guest pass system for access to rock festivals and convention halls.
American Express first entered the field with the Blue Card, but has rebranded the technology as Express Pay. Merchants who agree to consistently use EMVs and agree to certain terms will be rewarded with credit fraud insurance from the credit card company.
Discover first experimented with a keychain version of the technology, but has since moved on to an RFID sticker that can be attached to a cell phone or a key fob
