Q: I have been told that European credit cards do not use the magnetic strips that are used on American credit cards. They are more secure. What do they use and why don’t we use them here?
— Judy Olderman, Brookhaven
A: Cards issued in Europe, Asia and other parts of the world are embedded with a microchip that helps validate transactions and provides extra security. These cards, known as EMV (Europay, MasterCard and Visa), must be inserted into a reader equipped with a slot, and a personal identification number (PIN) must be entered to complete the transaction, compared to the swipe-and-sign method. EMV technology has been used in Europe since 1992, and the U.S. is the last "major market" to use the swipe-and-sign method, The Wall Street Journal reported. Cost is one of the reasons why U.S. retailers and companies haven't switched to EMV cards, but that could change next year. American Express, Discover, MasterCard and Visa have set an October 2015 deadline for companies to switch to EMV cards, a move that could cost up to $8 billion, according to First Data Corp. Swipe-and-sign machines will have to be replaced with new credit card readers that cost up to $1,000 each, and about 510 million EMV credit cards will have to be issued at a cost of about $1.25 to $2.50 each. Transaction time also is longer with an EMV card. Recent security breaches at Target, Neiman Marcus and Michael's, among other retailers, sparked a Senate Judiciary Committee meeting on cyberattacks and identity theft.
Andy Johnston wrote this column. Do you have a question about the news? We’ll try to get the answer. Call 404-222-2002 or email q&a@ajc.com (include name, phone and city).
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