By now, most credit card users have probably heard that the next generation of credit cards will have an embedded microchip called an EMV smart chip. For now, this chip is for use in countries around the world that have already deployed terminals that read these smart chips. These countries include Canada as well as many in Europe and South America.
Where this gets even more confusing is when cardholders realize that there are two types of systems that require EMV smart chips. Most EMV equipped cards issued in the United States are compatible with the Chip and Signature system. This means that the chip is used as a substitute for the traditional magnetic strip, and a signature is still required in most instances. The other type is a Chip and PIN system where the cardholder puts in a 4 digit pin up on request. [click to continue…]