The days of having only one kind of credit card that you swipe to use are over. Now we have chips and antennas in our cards, and devices to make paying easier and transactions more secure. But understanding the difference between the technologies -- EMV, RFID, NFC -- can be confusing.

Whether you're inserting your new chip card into a machine, tapping your card against a reader, or making payments through your smartphone, it's good to know just what kind of technology is in your physical -- or virtual -- wallet.

"I take the chip card and put it all the way in [the card reader] until it clicks and stops," says Ken Givens, director of sales at US Merchant Payment Solutions. He educates business owners and banks on how to use different types of credit card payment systems.

The technology that's been keeping him busy is EMV, which is the set of standards used in chip cards. To pay, you insert the chip end of the card into a reader, rather than swipe it. The chip makes it nearly impossible to counterfeit the card because it transmits a unique code for each transaction.

"It has what's called tokenization," Givens says. "Tokenization is where the actual card number is replaced with new numbers and new characters."

Another payment option that uses tokenization: mobile wallets such as Apple Pay and Android Pay. These wallets use NFC, or near field communication technology, to allow you to pay by holding your phone within inches of the reader. NFC uses radio waves to transmit information at a short range. Tokenization means you get the same fraud protection as EMV, but without having to insert or swipe a card.

NFC, RFID are related
NFC is also used in contactless payment cards, though somewhat confusingly, these cards are often referred to as RFID cards.

"RFID is a similar chip type product that sends a signal out -- a radio frequency signal," Givens says.

RFID is actually the granddaddy of NFC and a generic term for technologies that use radio waves to identify people or objects. It also refers to the long-range communication technology that's used in, for example, highway toll payment devices.

But NFC is a type of RFID that requires you to be within inches of the card reader, so fraudsters cannot skim your information easily. Still, as use of NFC-enabled mobile payments grows, contactless payment cards are being phased out.

Even as our cards get more sophisticated and harder to duplicate, Givens warns they're still vulnerable to hackers when you shop online -- and that's the next obstacle credit card companies are working on. 

See related: Video: Do you need a credit card RFID protector sleeve?, Video: Answers to your most-common EMV questions, Video: Mobile wallet security -- is it safe to photograph your credit card?

Published: December 15, 2015

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Updated: 10-22-2016

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