October 3, 2014
Bank of America announced on October 1st that all its new customers as well as business debit cards will come with the EMV security chip. With this announcement, Bank of America becomes the first bank based out of North Carolina to have switched to EMV for its debit products. Majority of the bank’s credit cards are already EMV enabled.
The purpose of using the EMV chip is to make the card transactions more secure. EMV (Europay, MasterCard, Visa) cards are embedded with a microprocessor chip that encrypts transaction information. Use of the chip alters the transaction data every time the card is used, and makes it very difficult to commit any card fraud through cloning or other methods of duplicating the card. However, EMV is not very effective against other fraud methods, and in the kinds of breaches that Target and Home Depot had to suffer, EMV won’t be useful. These fraudulent attacks were focused on tempering or getting data from the POS terminal at the retail store, and did not use individual card holders to get data.
Outside the US, different countries have already adopted chip technology and it is expected to gain traction in US sooner or later, as merchants start adding chip enabled terminals over the coming year.
Titi Cole, retail products and underwriting executive for Bank of America said during the announcement: Chip technology is an important tool in increasing card security and we want our customers to have the best possible experience when using their payment cards. The new chip-enabled debit cards will improve security of customers’ transactions when traveling abroad and at home as more U.S. merchants adopt chip technology.
The new cards with chips will also come with the current mag stripe that will work at merchant outlets that are yet to upgrade the POS systems. The card’s ATM function has been left unchanged.
All new customers will receive the chip enabled debit cards. Existing customers will get the chip enabled replacement cards as their existing cards expire or are replaced.
The bank has been adding EMV chips to different credit cards for its customers in the US since year 2012.