By the end of 2018, 96 percent of all American credit cards could have EMV chips (tiny microprocessors that store and guard card data more effectively than today’s magnetic strips) embedded in them, according to a new study from Javelin Strategy & Research, a company that specializes in monitoring and understanding payments and transactions. And, by the close of 2015, Javelin forecasts 166 million credit cards (29 percent of all those in circulation) are going to have these chips. Debit and prepaid cards are likely to migrate to EMV more slowly, with only 17 percent of them expected to have chips by the end of next year.

Plastic and chips

America has come late to the EMV party (the abbreviation stands for the companies originally behind the technology, Europay, Mastercard and Visa), and such chips are already widely used in other countries. One of the reasons for our tardiness is the sheer scale of the logistical challenge that migration involves in such a huge country as ours. Javelin reckons there are:

1. About 1.2 billion debit, prepaid and credit cards in the U.S.
2. Roughly 8 million point-of-sale payment terminals across America.

All of those must ultimately be replaced, but we still have a long way to go. So far, only 1.5 percent of cards and 10 percent of terminals are EMV compliant.

Your credit cards should still work

Assuming the U.S. follows other countries’ models, it’s unlikely you’re ever going to find yourself in a position where your debit, prepaid or credit card can’t be processed. In Europe, for example, cards come with magnetic stripes as well as EMV chips, so they can be used anywhere. And even the latest payment terminals can swipe cards’ stripes as well as read chips.

Published 05/28/14