New chip on credit card

Credit card with the chip

The new chip card is called EMV, which actually stands for Europay, MasterCard and Visa.
One of the very important byproducts of that is that the chip itself is an encrypted chip that’s very secure, the chip contains all of the information from the card--it keeps the current balance and all of the parameter settings and details about the consumer.
The magstripe that’s on the back of most of our plastics, the chip offers an additional layer of security in addition to the normal security that comes with a payment card. The difference is, when you use a magstripe card, you just swipe it down and it authorizes. With the chip card, you actually insert the card into the machine, it clamps down on the chip and reads the chip, and then it does the authorization.

This chip prevents the type of fraud called counterfeit fraud.
That’s where I get your number, manufacture a fake card, and when I come into the store, I’ve got a card with my name on it that matches my ID but really it’s swiping your information. It looks like I’m me but I’m actually counterfeiting myself as you.
The chip eliminates that because even if I steal all of your information, I cannot create a chip.
There’s a lot of technology behind that, but really what it does is allows for an encrypted image of the consumer to be protected against counterfeiting.
So in short on a stolen card, the name and other information on the magnetic strip would be different from the information on the chip, so this way the fraud can be prevented.