Banks Introduce EMV-chipped Credit Cards To Keep Bitcoin At Bay

By Bitcoinist.net Sep 26, 2015 4:54 AM EST

Credit cards are one of the most common payment methods around the world, yet they are also one of the least secure forms of payment. There is no other payment method in history suffering from such a high rate of fraud and chargebacks, as these cards were never intended to be used for online payments. Several banks have issued a new version of their credit cards, which should make them more secure.

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The EMV Microchip In Your Credit CardBitcoinist_EMV Chip Credit Card

Whenever someone holds up a credit card, there will be a plastic-looking chip on the left side of the card. This chip is designed to be read by credit card processing terminals all over the world, to make the payment system more convenient and streamlined. Many people believe this chip holds all of the card owner’s sensitive information, but that is not the case.

To be more precise, that wasn’t the case, until now. Various banks around the world have started shipping out a new version of credit cards, packed with an EMV microchip. Rather than storing all of the cardholder’s information on the magnetic stripe on the back of the card – which is easy to copy and steal -, these EMV chips will contain all of the sensitive data.

Swiping a card at any location will no longer be such a high-level security threat to card holders, as the sensitive information can not be read through card skimming anymore. Making a duplicate of the valuable credit card information itself becomes much harder, as fraudsters would need tools to replicate an exact copy of the EMV chip. Up until this point, no such breach has been reported.

But there new types of credit cards will also bring some minor changes for both consumers and merchants. When paying at a location with an EMV-enabled card, the checkout process will take a few extra seconds to complete. Merchants, on the other hand, will need to install new payment terminals if they want to be compatible with EMV-enabled card payments. Failure to do so could result in credit card fraud charges being footed by the retailer.

Grasping At Straws To Keep Bitcoin At BayBitcoinist_EMV Chip Credit Card Bitcoin

While the efforts to make credit card payment should be applauded, these new chips are one of the top financial innovations the sector has seen in the past 50 years. Financial institutions are grasping at straws to keep consumers away from other viable alternatives, such as Bitcoin, which are not in control of the banks or governments.

Merchants will have to upgrade their infrastructure at an additional cost to accommodate for these EMV-enabled payments. If they decide to accept Bitcoin as a payment method, however, there is no additional infrastructure to set up. Plus, they will be charged lower payment processing fees, and are protected from Bitcoin price volatility.

What are your thoughts on these new EMV chips to make credit cards more secure? Do you own such a card already? Let us know in the comments below!

Source: CNN Money

Images courtesy of Shutterstock, Merchantdiv, Frontline Processing

Originally posted on: Banks Introduce EMV-chipped Credit Cards To Keep Bitcoin At Bay

  • Laslo Munich

    Good luck getting reimbursed by the retailers where you were skimmed. This is the point. The “Liability Shift” ultimately means “go talk the the point of purchase provider”. This is why you lose.

  • MyrddinWilt

    It has been obvious that EMV would be deployed in the US eventually for over a decade now. If people buy POS terminals that are obviously going to become obsolete, they deserve what they get.

  • Laslo Munich

    The number is 31.4%.

  • Laslo Munich

    For a small retailer doing $50k in CC transactions per month, with the full “EMV will stop 90% of card present fraud” message applied, will have prevented approx. $26 per month in fraud. For many businesses, the expense of emv enabled payment terminals (pin pads) alone is 3-5 years , software upgrades, implementation, fees, etc. can easily push that number out to a decade. I am not the president of a POS company – and the guy who is has absolutely nothing to gain by poo-pooing EMV. I would not go so far as to say that card present fraud is “ridiculously rare” – but it’s a drop in the bucket when compared to the $4.5 trillion annual payment card business in the US.

  • Laslo Munich

    I work with hundreds of retailers on a daily basis and am part of the supply chain for EMV equipment, have built large-scale payment gateways, have built and certified p2pe solutions, etc. This isn’t the forum for me to dig into your $5.5k loss, and why you were unable to recoup it. But, I can tell you with a great deal of certainty that your situation is the exception.

  • Bruno

    This is bush league psyche-out stuff. Laughable, man. Ha ha!
    What a shit piece of “journalism.”

    Ditto Laslo:
    “For heaven’s sake…. EMV was rolled out in half the world in 2006.
    Bitcoin was invented in October of 2008 and had no serious traction for a
    couple years. The entire premise of this article, not just the headline
    is not only misleading, but shows a deep lack of intellectual curiosity
    by the author.”

  • Ghandiman

    My cards were apparently duplicated: the fraudulent purchases took place at brick & mortar stores: at a Walmart store and in some electronic appliances & sports equipment stores – all in other states from where I reside. It seems the physical card was always present there, although I never lost my cards. I used one in Chinese restaurants in Montreal (one of the ‘hits’ happened there and there was some information published shortly afterwards that scammers were quite ‘popular’ in Chinatown there…) and many other places where the magnetic strip readers (scammers) apparently could have copied the information. From what I understand, if I use cards with chips at places with EMV chip readers only, this won’t be possible. I am not an expert in this field, just going by what I read in the article.

  • thirdalbum

    This says more about the intelligence of Walmart staff and customers than it does about EMV.

    With EMV, you insert the card chip-inwards-and-facing-you into the slot at the bottom of the machine. The rest of the transaction is EXACTLY the same as it would be if you swiped – and remove your card when it says. EMV takes about 1-2 seconds longer.

    If you were held up for 10 minutes, I bet the customer was trying to swipe and it (of course) wasn’t working.

  • thirdalbum

    Bitcoin, the system itself, is provably secure against fraud, which is the point of this article.

    Theft is a different story, and that story depends on the ability of attackers to get into your computer. People with mobile wallets are pretty secure against theft of their BTC if they have a PIN on their wallet. People using hardware wallets like the Trezor are extremely secure against theft.

    In short, your post is off-topic. Nobody was talking about theft, they were talking about fraudulent transactions.

  • thirdalbum

    Same with Australia. I think the article refers to Australia and Canada “following suit” with the liability shift, not in the adoption of EMV. We’ve had it for years and it is ubiquitous. Can’t wait for the magstripe to be completely disabled.

  • PeterBrayTweets

    Laslo, I don’t know where you get your info, but you couldn’t be more wrong. For all 21 of my pads, I paid less than half of what you quote including installation, and my previous pads lasted 8 years+. My losses last Christmas due to ONE person who hit 3 of my locations with a fraudulent card was more than $5,500 – and I don’t get a whiff of the fraud until the chargeback comes. 100% of our transactions are p2p with tokenization. With the new EMV machines, it brings our risk close to 0. The real issue is this article was written to try to promote BitCoins that has zero merit or depth.

  • Laslo Munich

    So, you’re paying upwards of $11k just for pads that don’t typically last two years. Then you’re going to pay your vendor to implement. Then disrupt your customers…. While the giant problems with card not present transactions and breaches are over 20x higher? And your bank now holds YOU responsible for all costs rather than them….. Meanwhile, retailers can still store plain text credit card numbers, and p2p encryption and tokenization is largely ignored. You’re going to responsible for breaches, too.

  • Laslo Munich

    Behind the power curve by solving the smallest problem….. By bending retailers over and making them responsible for the bank’s shortcomings, and rather than providing lubricant, the banks and card issuers make the retailers pay to take it dry and deep?

    Yeas chief.

  • Stephen Chen

    I attest to that there are already some countries in EU where a magstripe fallback doesnt work… and can only be remedied if clients call their banks

  • Stephen Chen

    well I have to agree that while adding the chip may still allow fraudsters to charge the card, but limits their capability to, banks may decline transactions done by swiping if the chip facility is available or when they fall back to the magstripe, at least it could trigger a security alert. In fact some countries in EU are convinced of its efficacy and have already implemented all cards should have a chip and in our statistics indeed prove that chip cards hasnt been cloned yet..at least for now.. its like a game of cats and mice, where the bank improves their security and fraudsters find a vulnerability. and by the way counterfeit is VERY common in the US at upto 30% of overall fraud… a person just have to ride a cabbie or use a vending machine and viola multiple fraud occurs in as less than an hr. and well everyone knows about the breach in TARGET… counterfeit fraud did rise significantly after that (although banks did find a way to re-number existing cards that they know are affected by the breach and hence dampening the losses. The thing is an average user MIGHT NOW KNOW that their card had been skimmed if their bank keeps their eyes on it and issues a new one even before fraudsters are actually able to get cash or use it for retails. while I understand you have your sources of data, but yours may have been based on actual successful counterfeit and chargeback cases but mine is based on bank statistics of actual fraud cases whether successful or not (there is such thing as early detection which blocks highly suspicious transactions) you might wanna check w/ VISA/ MASTERCARD/DINNERS if you wanna prove Im wrong.

  • pieapp676

    so well written. thank you!

  • PBMax

    How is this competing with Bitcoin? Consumers and merchants are still moving around infinitely inflatable fiat currency. Nothing has changed.

  • Tom

    Scampcat is clearly a shill… EMV has been working well and quite effectively in Europe for a decade… And their card fraud rate is but a very small fraction of that in the U.S. Once again, the U.S. is far behind the power curve…

  • PeterBrayTweets

    Laslo, I agree that the article lacks the depth or reality why EMV credit cards are being implemented, but I TOTALLY DISAGREE that the payment industry wants to line their pockets with cash. Total bulls*t. I’m a retailer with five locations. The amount of low-life thieves who try to use fraudulent credit cards is immense. We’ve been ripped off for thousands in the last year – and these new machines will mean we won’t have the same risk going forward. I happily paid to have 21 of these machines installed to limit our risk.

  • thecrud

    Their interest rates insure that they get ubered sooner or later.
    But Bit Coin is not even their competition in any area what so ever.
    If Pay Pal or someone like that gave low rates loans for Internet payment credit cards will be in real trouble.

  • Donovan Francis

    Actually I live in Canada and I’ve had both credit and and my Interac bank cards with the chip for at least 5 years. We are not following suit as we are there already.

  • scampcat

    hah! shameless ad for vaporware. love it.

  • scampcat

    I’d want to see supporting links to such claims of “2022” and not being able to use a non-chip method of payment outside the originating country. Not as a source of contention, but a quick google search yielded nothing to support your claims, and they don’t support failover payment methods (like manually entering the card number when the mag stripe is bad – a still completely accepted method of failover card processing).

  • MyrddinWilt

    The big hole in the card present system has turned out to be data leaks from the readers and the cloud services causing large numbers of card numbers being disclosed and huge numbers of cards having to be reissued.

    The merchants quite rightly pointed out that the card companies have the ability to eliminate this type of fraud using EMV and refused to pay fines demanded by the card associations. They won and EMV rollout in the US is the result. Australia and Canada have no choice but to follow suit as cards won’t be issued with a magstripe in the fairly near future.

  • MyrddinWilt

    The US is the last major territory to deploy chip and pin. Support for the magstripe technology will be phased out as the EMV cards are deployed. It won’t be possible to use a magstripe card out of your home country. By 2022 the magstripe system will go away.

    I am not in the payments business right now. But the system I worked on is now called PayPal Merchant services so I know quite a bit about fraud rates.

  • MyrddinWilt

    Card present fraud is actually very common. Anyone who skims a credit card has all the information needed to clone it. Card not present is much higher of course but card present is creeping up.

    Of course if you are President of a Point of Sale company trying to sell obsolete machines that don’t do Chip and PIN you probably have a different view on the matter.

  • william barnick

    Smartmetric makes a card that is being produced now that is not only compatable with EMV chips but has a built in fingerprint scanner that preety much prevents theft, skimming and anybody other than the owner from using the card. If it is lost or stolen, no problem. It has a built in battery to run a computer and the scanner. Talk to Chaya hendrick to get the details on the timing of the card release.

  • MyrddinWilt

    What an utterly ignorant article. EMV has been in progress for 20 years and the rest of the world switched over ten years ago. EMV is a mechanism to reduce card present fraud and it is highly effective. Card present fraud using EMV cards is essentially non existent, the only fraud that is possible is using support for the legacy magstripe scheme at some point in the cycle.

    Nobody is afraid of or panicking about BitCoin or as we call it in the cryptography business, ‘Shroedinger’s Cash’.

    BitCoin is to finance what homeopathy is to medicine.

  • cuthbert51

    This has nothing to do with Bitcoin, which at this point is unarguably a failed social experiment. Even if this is a Bitcoin website, quit trying to shoehorn it into a larger story involving credit card security.

    Additionally, you state “There is no other payment method in history suffering from such a high rate of fraud and chargebacks, as these cards were never intended to be used for online payment,” which is completely irrelevant to this story as well. How will a physical card, that has changes on their physical use, have any role in online pay, which does not involve the physical card, and is therefore exempt for any change to have an effect on online shopping?

  • scampcat

    You don’t know much about EMV if you think it’s more secure. It’s not. It’s a fraud responsibility shift to the merchant, that’s all. If you think otherwise, you’ve been tricked and you need to educate yourself. It’s a shame that you’ve had several card numbers fraudulently used, but at no point did you say how they were used – online, cloned by someone that had your card in their hands for some reason, etc. So your story is certainly unfortunate, but nothing more than that. EMV won’t prevent whatever method your cards were fraudulently used, though I highly doubt a physical card was created as a duplicate. And even if it was, you STILL have the MAG STRIPE on your card! You have a false sense of security with the EMV. And CARD-PRESENT (the card is physically being swiped) is still a very rare fraud scenario compared to the other types of card-not-present frauds.

  • Jakob Stagg

    It looks like EMV is exploiting an opportunity to avoid responsibility by shifting it to merchants. The change will probably encourage scammers to increase efforts before any possible increase in security to interfere with their livelihood.

    When scammers are hunted down, drawn and quartered, and hung from every light pole in the country, they will reconsider their chosen profession. Until then the consumer will continue to be raped and thrown in an alley.

  • Constantin Bartosek

    This article is complete nonsense. The author has no idea of what he’s talking about.

  • scampcat

    I didn’t give my opinion. I gave a fact based on empirical data from our programs.

    EMV cards still carry the mag stripe. Adding EMV changed nothing but the liability shift when fraud occurs. Skimming and other fraud activities are not reduced by just adding the chip. It’s a fool’s gold. The chip and pin do not change the ability to swipe the card when the chip cannot be read, and it also does nothing for online transactions.

    A “cloned” credit card is still going to be easily done, and a fake chip can be placed on the clone, which, when it fails to transact, they’ll fail over to the mag stripe on the card. Again though, things like clone cards are extremely rare, unless in high fraud countries like Russia and neighboring states.

    Claims of high card-present fraud are nothing but scams played on the retailer to scare them into various fraud protection services such as the one you probably represent. Given that our software program is cloud-based and we negotiate the processing, we know very well what the fraud rate is. And I can tell you with absolute certainty that it is extraordinarily rare in Canada, US, and UK. The data tells the story here.

    As Laslo said, we have bigger issues that should be address rather than the rare case that EMV solves. Nothing against EMV; it’s just being over-hyped as the solution to unrelated problems due to ignorance. And it has nothing to do with Bitcoin whatsoever.

  • wingknut

    “..to keep Bitcoin at bay…”

    Wow..dont break your arm patting yourself on the back over this…

    This technology was around way before Bitcoin..but hey, sure, this was done to keep Bitcoin down, sure. Ok.

  • Stephen Chen

    card present transactions arent that rare as you think… at least in my point of view, or even if they are, the amount of bank losses could be significant. but then this wasnt the issue raised in the article… the author emphasized skimming, or card cloning which are, btw, not considered as card present fraud but rather a Counterfeit which accounts to (in my experience as a Fraud Risk Analyst) about 30-40% of fraud and its still rising.

  • Michael Dann

    Walmarts already using this crap and I can tell you its far from convenient, I got held up in line because neither the cashier or the customer in front of me knew how to use the damn thing, …Bitcoin is about the same time…

    Yes. We all know merchants never fumble around and fuck up accepting bitcoin.

  • Bieber before hos

    Walmarts already using this crap and I can tell you its far from convenient, I got held up in line because neither the cashier or the customer in front of me knew how to use the damn thing, about 10 mins later and 2 supervisors they got it working. Bitcoin is about the same time if only walmart would accept it, but litcoin would be almost as fast as credit card I think. I’m sure Tysons bitcoin atms will bring more businesses to consider using bitcoin, but tips are where bitcoin use is most needed right now, you can tip with cash but those can be stolen or taken away by the police, your bitcoins however aren’t so easy to get and probably less likely to be searched for on your phone.

  • Ghandiman

    I had my credit cards scammed about 4 times for the last few years and these were different cards and the scams happened in Canada, US and Mexico. Each time the banks reimbursed me for the losses but it is comforting to know that there is a safer alternative with the chip (I have one with it now). Some people here are saying that credit card fraud is ‘extremely rare’ just because this didn’t happen to them (?!) Little egocentric, maybe?.. If you don’t have cancer I guess this is certainly not a problem in nowadays’ world, is it?.. May be checking the statistics first would give your opinion more solid ground.

  • James Malenfant

    If it is not your charge, it is not our problem. At least that is what my bank says. I have never had any kind of problem with a debit, or credit, card. I shop online, eat our, shoo everywhere. I think this is a bunch of hype. I use whatever cards they give me. No problems with changes here. Have a great day!

  • scampcat

    Totally agree. Card-present fraud transactions are ridiculously rare, and I know – I’m the president of a Point of Sale company. Ignorance is what is pushing EMV as some sort of silver bullet. As you said, it’s not the problem that needs solved. The first thing to take seriously is online fraud. The various approaches right now are poor solutions, and it’s a rampant problem (again, knowledge from experience as a former director at Authorize.net).

  • David Theil

    Thank you Laslo. Exactly my thoughts.

    The deceptive tone of the article, that EMV is a recent reaction to trying to best bitcoin transactions gave me pause. Yes, the rollout of EMV now *in the US* is likely in part driven by recent credit card database breaches in the US, however the article ignores that EMV liability shift to merchants took place between 2005 and 2008 in Asia, Europe, Africa, Latin and South America, leaving Canada, US, Mexico and Australia the holdouts. https://en.wikipedia.org/wiki/EMV#Implementation

    Then the attribution to CNN, without making clear the bitcoin drumbeat was added just makes the whole thing feel very slimy.

    The article is clearly a plug for bitcoins; I could be wrong, but learning who backs this website might be quite illuminating. Why it is not listed as “ad” or editorial on Google news is a mystery to me. They must have found a way to game Google’s rankings for their news page.

  • John Keller

    LOL! Like Bitcoin is secure against theft!

  • Nick Beard

    CNN’s article actually makes no mention of Bitcoin whatsoever. One can safely attribute the ignorant hysteria and lack of research squarely at Bitcoinist’s feet on this one.

  • Laslo Munich

    For heaven’s sake…. EMV was rolled out in half the world in 2006. Bitcoin was invented in October of 2008 and had no serious traction for a couple years. The entire premise of this article, not just the headline is not only misleading, but shows a deep lack of intellectual curiosity by the author. The reason EMV is finally getting rolled out in the US is because the payment industry wants to line its pockets with cash. The real danger is breach, yet we’re asking retailers to spend far more than that have at risk to combat counterfeit cards. Small retailers could see an ROI of 10+ years; it’s crazy. Both consumers and retailers are intrigued because of the recent highly publicized data breaches. EMV will take counterfeit card present transactions down to next to nothing in the US – unfortunately, that’s not the problem that needs solved.

    Not everything in payments is related to Bitcoin – no matter how cool you think you are Bitcoinist and CNN.

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