MoneyLife

Are Chip Cards Safer?

By Anna Yen
are chip cards safer

If you’ve gotten a new debit or credit card in the past few years, you’ve probably been introduced to chip technology. These small, metallic squares work as a replacement for the magnetic strip on the back of your card. But with new technology comes new questions–specifically, are chip cards safer?

In short, the answer is yes, which is why the RoarMoneySM Debit Mastercard® comes with features like the chip and pin combination as well as contactless tap-to-pay technology to further enhance security. But there’s more to chip tech than meets the eye. 

How does a card chip work?

Chip cards–or EMV® cards–were originally developed by Europay, Mastercard, and Visa as a joint venture in consumer safety. They look like “traditional” cards with one exception: the small, metallic square at the edge. 

These squares, or chips, contain payment data that is very similar to the strip on the back of your card. This allows vendors to read your information and process the transaction with the simplicity of a chip. 

But while your chip or strip can be used to pay interchangeably at some merchants, they don’t work in quite the same way, leaving many users with unanswered questions.  

How do you use a chip card?

When you shop at a business that accepts chips, their payment system will have a slot for you to insert your card. While swiping is a quick in-and-out motion, you will actually need to leave your card in the reader until the system prompts you to sign, enter your PIN, or remove your card.  

How does the chip increase security?

The magnetic strip in your card contains all of your payment information, which makes it easy to steal or counterfeit money. But chip transactions generate a unique code for every payment, which is only valid for one transaction. And because the security code changes every time, your information is harder to steal.  

Why does my chip card still have a magnetic strip?

Not all merchants have updated their payment systems to accept chip cards. As a result, American debit and credit cards still come with both a magnetic strip and a chip. While chip cards transactions are safer due to their unique code, a scammer can still compromise your card as long as your card still has a magnetic strip.  

Do chip cards increase online security, too?

Unfortunately, there’s no system in place that requires the use of chips online or over the phone. As such, if someone steals your card or card number, they can still use it to commit online fraud. You can minimize the risk of fraud by keeping your card in a safe place and regularly checking your bank statements for fraudulent transactions. 

Why are chip cards safer?

Chip technology in debit cards and credit cards increases safety because of their unique codes which require vendor verification. On the other hand, cards that only have magnetic strips are easier to compromise, as they do not require immediate or automatic vendor verification. 

Benefits of chip cards

Chip cards also have other security measures that make them superior to strip-only cards. Some of these benefits include the following perks:

  • Increased cloning difficulty
  • Sophisticated encryption technology
  • Chip and pin security

Below, you can see the value of these features when it comes to debit card security. 

Difficult to clone

Because chips generate unique transaction codes that must be verified, they’re more difficult for scammers to clone or steal. And if a scammer does try to recreate the chip, many modern payment systems have protections that prevent counterfeit cards from being accepted. Unfortunately, scammers can still clone the magnetic strip onto a counterfeit card.

Sophisticated encryption technology

Chip cards also come with sophisticated encryption technology that is built directly into the microchip. This cryptographic card authentication provides a level of debit card security that magnetic strips just can’t match. 

Chip and pin security

Many new cards come with chip and PIN setups, both of which further enhance the security process. These cards are more secure than chip cards and signature-only cards, as it’s harder for a fraudster to guess your PIN than it is to forge your name.   

Chip vs magnetic strip

You’ve seen the basic differences between chips vs magnetic strips, such as the enhanced security, transaction code verification, and chip and pin technology. But there’s another important difference between chip and magnetic strip cards: tap-to-pay. 

Chip cards that function as tap-to-pay cards allow you to tap your card over any terminal that accepts contactless payment. Tap-to-pay debit and credit transactions are secured by the same one-time code technology as chip cards. 

RoarMoney debit card with chip–and more! 

If you’re in the market for a new debit card, a MoneyLion Debit Mastercard or RoarMoney virtual card can provide safe, secure ways to bank and pay with cards. In addition to being chip-enabled and having tap-to-pay card technology, a RoarMoney account also comes with the following:

  • FDIC insurance
  • Multi-factor authentication
  • Contactless payment methods (tap debit card)
  • Protection against unauthorized purchases
  • Instant card locking via the MoneyLion app
  • Price protection

Safe and secure debit card transactions are in your future

Modern chip cards are safer, more secure, and far more convenient than outdated, magnetic strip-only cards. With a combination of one-tap contactless payments, chip and pin requirements, and transaction code authentication, you can protect yourself–and your money–from unnecessary risks. 

If you’re ready to take the next step towards a safe and secure banking future, consider a MoneyLion or RoarMoney account. For only $1 per month, you’ll get access to:

  • One-tap, chip-enabled technology
  • 0% APR cash advances
  • Credit builder loans (for an additional $19.99 per month)
  • Access to over 55,000 ATMs
  • Robust security features, card lock, and customized alert
  • And so much more!
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