EMV chip cards aim to reduce fraud and ID theft

Question: What are the benefits to the new EMV chip cards? They take so much longer to process than the old swipe cards.

Answer: EMV (which stands for “Europay, MasterCard and Visa,” the companies that created the standard) is a type of credit card technology that is becoming more prevalent in Hawaii. EMV cards are distinguishable by the small computer chip embedded into the front of the card, which is why they’re also known as chip cards or smart cards.

Traditional credit and debit cards have a magnetic strip that stores unchanging data. If a hacker were to copy this data, he could replicate it over and over again, posting multiple transactions and racking up fraudulent charges until the card is canceled. EMV chip cards, on the other hand, create a unique transaction code every time they’re used. Even if a hacker did intercept a code from a specific purchase, he wouldn’t be able to use it again — the transaction would simply be denied.

Many financial institutions in Hawaii issue EMV chip cards, and businesses have slowly been switching over to the new point-of-sale terminals. Consumers may have noticed or used the new card readers in stores. The chip cards take slightly longer to process, and you need to leave them in the reader until the transaction is complete. But other than that, they are very user-friendly and much more secure than traditional mag-strip credit cards.

Q: What are other fraud-prevention technologies?

A: Smart chip cards help reduce fraud, but cannot prevent it altogether. Consumers must keep their card information secure and monitor their accounts for fraudulent activity. A number of mobile apps are available to help track card activity and even flag suspicious transactions.

Mobile wallets, such as Apple Pay, Samsung Pay and Android Pay, are new forms of payments that are very secure because the card number is not used in the transaction. Instead, a randomly generated “token” replaces the card number. The token is specific to the smartphone that is used to make the payment and can’t be used by a hacker on another device. In addition, similar to EMV cards, a dynamic transaction code is used for each purchase, so they can’t be duplicated.

Q: Should I be worried when using mobile apps like Mint or Venmo?

A: Mint is a convenient personal budgeting and expense-tracking app that can help to provide a quick snapshot of your overall financial health. Mint allows you to track expenses across your different credit cards, checking, savings and investment accounts. Venmo is a payment app that allows users to send money from their bank account to anyone with a few clicks on their mobile device.

Budgeting and finance apps are becoming increasingly popular for their convenience and the timely nature of payments. However, whenever you grant a service access to your bank account, you also open the door to identity theft, stolen money and fraudulent transactions.

When it comes to any of these types of apps, being smart and vigilant about how you use your apps is the most important thing you can do. Enable any and all security features like real-time notifications, keep an eye on your transactions and keep the number of connected devices to a minimum.

Q: What are other best practices to prevent your credit card or debit card information from getting stolen?

A: There are a number of things you can do to protect your information:

Guard your information online. Clear your saved logins and passwords, especially if you’ve been working on a public computer. You can also change your passwords every one to three months.

Monitor your bank and credit card statements. Check your accounts regularly for any unauthorized purchases.

Secure information and documents. Keep personal information and account numbers in secure locations. Shred sensitive documents before tossing them into the trash or recycling.

Carry only one or two cards in your wallet. This can minimize your losses if someone steals your wallet or purse.

Interviewed by Star-Advertiser reporter Kathryn Mykleseth