All you want to know about EMV chip cards

Are you wondering why you received a new debit card while your existing debit card is just working fine? Well, here is the reason. Banks are in the process of replacing the existing magnetic strip debit and credit cards with latest EMV chip cards, to comply with Reserve Bank of India guidelines.

As part of its security measures for transactions where you swipe your card, RBI in May 2015 asked banks to gradually phase out the magnetic cards and move to EMV chip cards. In August that year, it set December 31, 2018 as the deadline for the changeover.

EMV chip technology is the latest global standard for card payments. EMV is an acronym for Europay Mastercard and Visa, who developed this technology. EMV cards are chip-based payment cards with enhanced safety features that are designed to prevent fraudulent practices such as card skimming and cloning.

Here's how they work. Your old credit and debit cards store your data on the magnetic stripe found on the reverse side of your card. This makes it easy for a fraudster to copy your data when you swipe the card. EMV cards, in contrast, store your data on a microprocessor chip embedded in the card.

This means that the card generates fresh user data every time you transact, making it impossible for fraudsters to copy your original data from your card.

The other feature of EMV cards is that they use both your card and a secret PIN to complete a transaction. When you use your EMV credit or debit card at a terminal, it generates a unique encrypted code called a token or cryptogram, which is unique and specific only to that transaction.

It cannot be used another time. The token is generated from a combination of information contained in the chip and that in the terminal.

A recent response to Parliament stated that, in the three years to FY17, India saw 3,409 cases of reported bank fraud involving credit cards, debit cards and internet banking with the amount lost at ₹134 crore. In recent times, bank customers have grappled with increasing attempts to defraud them using practices such as phishing, vishing and card skimming. The old magnetic cards are quite vulnerable to skimming. Fraudsters place a skimmer device inside the card swipe slot in ATMs or terminals at the point of sale, to read the customer data stored in the magnetic stripe.

They then use this skimmed information to clone a new card with identical details. Or alternatively they transmit this information to fraudsters across the globe who then siphon off the account balance by shopping online. EMV chip cards prevent such skimming, because they do not reveal your user data to the terminal at the time of swiping the card and instead generate a cryptogram.

Indian banks are now vying to attain global standards in product and service offerings. Therefore, migration to EMV cards is inevitable as it represents the latest standard in credit card security. Many developed countries have phased out magnetic stripe cards to adopt EMV technology.

Because it’s not a good idea to begin your New Year without cash. Banks are all set to deactivate magstripe-based debit cards this December 31 to comply with RBI guidelines. If you received your debit or credit card after September 1, 2015, it is likely that it is already an EMV chip card. If it is older, it may need replacement. You can find out if you already have an EMV card by examining the left corner of your card where the EMV chip is usually embedded. If you own a mag-stripe card, your bank should have replaced your card by now. If it hasn’t, do follow up to get a replacement.

As you go on a card-swiping spree this Christmas season, make sure you don’t gift away your bank balance to fraudsters.

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