Enjoy greater security with EMV chip debit cards: All you need to know

State Bank of India (SBI) has asked its account holders to exchange their existing magnetic-stripe cards with EMV chip debit cards. In 2015, the Reserve Bank of India (RBI) had asked banks to issue chip-based debit and credit cards only. SBI has made it mandatory for all account holders to switch to these cards by the year end. No charges will be levied for the new cards. They can be obtained either through internet banking or from the home branch. Other banks have also started issuing EMV chip credit and debit cards. They give them while issuing a new card, but have not made the replacement of old cards mandatory yet.  

What is an EMV chip card? How does it work?

It is a credit or debit card with an embedded microchip. EMV stands for Europay, MasterCard, and Visa - the three organisations responsible for the standard. Chip card technology helps reduce the risk of fraud during card-present transactions.

How are these cards different?

Magnetic-stripe cards broadcast information into the payment terminal as it is. EVM chip cards have encryption built within the chip. When one dips a chip card, it establishes communication with the payment terminal in an encrypted format and confirms the identity of the holder. The Square Reader and Stand (EMV card reading POS machine) keeps this information safe by encrypting it as soon as it’s received.

What are their benefits?

The encrypted code created for each individual transaction is extremely tough to emulate or breach, say experts. Hence, these cards are safer. Cardholders will have greater confidence in using them for in-store as well as online purchases. EMV-enabled cards help to reduce fraud resulting from lost, stolen, and counterfeit cards. 
To what extent will their use curb frauds?

EMV cards have reduced the severity of card skimming. “Card issuers and merchants provide new ways to combat fraud, and chip-PIN technology is one of the most important developments to have come along in recent years,” says Ramaswamy Venkatachalam, managing director–India, FIS, a leading provider of banking and payments technology. 

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