New credit cards containing so-called EMV chips offer enhanced security for in-store purchases but not online purchases. In our ongoing series of frequently asked questions about EMV cards, Randy Vanderhoof, head of the Smart Card Alliance, explains why
“The way EMV protects payment cards is that the computer chip in the chip card generates a unique one-time code each time the card is used,” he says. “That one-time code, if it’s copied or stolen from the merchant system or from the terminal, can’t be used to create a counterfeit copy of that card or a counterfeit chip transaction.
“So the security is only there when the chip is involved in the payment transaction,” explains Vanderhoof. “But if the card is used at a merchant that has not enabled chip, or used online when we’re shopping and we’re simply entering in the payment data on the computer, then you’re not getting any of the additional benefits of security that the EMV chip card provides.”