The news has been abuzz with the new smartchips that are being rolled out for credit card users across the United States. They have caused a major disruption to how Americans interact with their old trusty pieces of plastic. Netflix, the online video streaming service, has even gone so far as to say that these new chips were in part to blame for their poor fiscal performance last quarter -- causing slower than expected subscriber growth. For all this ruckus surrounding them, one question that sits on the minds of many is: "are these new cards any good?"
Outside of the headaches it brought along with its migration, EMV brings many advancements and benefits to U.S. consumers. Despite the positive traits that smartchips bring with them, many individuals are unaware of them. According to a recent survey conducted by Fiserv, a global financial services technology company, 29% of people have no idea what the benefits of EMV are -- 8% confuse EMV cards with prepaid debit cards. What readers should know is that the benefits of EMV to consumers fall largely into two categories, which are explained below.
- Greater Global Acceptance. EMV is not the new kid on the block. While the technology may be new to the United States, it is old news to the remainder of the world. In the United Kingdom, EMV has been the standard for close to a decade. Even North Korea has beaten the U.S. to the punch, when it came to putting smartchips on credit cards. Lagging behind the rest of the world carried negative impacts for U.S. travelers, who hoped to use their credit and debit cards abroad. In the past, without these chips, it would be impossible to pay in certain locations throughout Europe and Asia, forcing tourists and travellers to rely solely on cash transactions.
Despite the U.S. moving forward with EMV, some U.S. consumers may still run into trouble abroad, due to the differences between chip and pin and chip and signature EMV cards. The United States has moved to adopt the chip and signature variant of EMV technology -- a slightly less popular and less secure feature. In places around the world, where chip & pin is the standard, using U.S. EMV cards may still create issues at unmanned terminals, such as automated ticketing stations. For example, according to research by ValuePenguin, places like France, Ireland and the U.K. are predominantly pin-based.
Most Consumers Still Don't Have an EMV Card
Banks are still in the process of rolling out updated cards, and most consumers are yet to receive theirs. According to the same Fiserv study mentioned earlier, approximately 38% of credit card consumers received an EMV card by now. This represents a substantial year-over-year growth. When this survey was conducted in 2014, just 13% of respondents had an EMV card.
If you still have not received a chip-enabled credit card, you can try calling your issuer. And requesting one Some banks will be reluctant to issue new cards, unless their customers explicitly submit a request. Keep in mind, however, that if a new card is issued with a new number, you will have to go through and update your auto-payments - hopefully for the last time ever. Just don't forget to do the same with Netflix - their next fiscal quarter depends on it.