Bank of America will begin issuing EMV credit cards to high-income, high-net worth consumers in the coming months as part of a new security program. EMV, which stands for EuroPay, MasterCard, Visa, is a card type popular in Europe, where credit cards are more frequently read off a chip rather than a magnetic strip.
Magnetic strip cards have been criticized for a lack of security. By using a chip to store customers’ data, banks can significantly cut down on credit card theft and fraud. A chip is much more difficult to hack and read which repels credit card fraudsters from actively seeking the cards as a target.
Bank of America will be the first American bank to issue EMV credit cards. Doing so will cost the company as much as $2 more per credit card, but the company expects to recoup the investment on higher transactional volumes. Travelers who frequently go overseas will undoubtedly find an EMV card advantageous in foreign markets, where the technology is much more common than it is in the United States.
Visa and Master Card have made public their intention to roll out EMV processing technology in the United States. The format is slowly gaining traction with credit card users, who see better security as a huge benefit to using new EMV-enabled credit cards. By 2015, all Visa and Master Card customers will have to use new EMV processing technology or face higher fraud-liability costs as part of their contractual agreements.
As the technology spreads through the United States, technology insiders believe it will permeate quickly. Older, non-EMV credit cards may become a much more valuable and concentrated target if all but a few processors are changed in the coming years. As such, any adoption should be relatively quick, especially if large big box retailers and chain gas stations catch on to the safer EMV credit card.