Chip Credit Card Adoption Reaches 88% for MasterCard in US
Image: Ciaran McGuiggan/Flickr/Flickr


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Chip Credit Card Adoption Reaches 88% for MasterCard in US

It's been almost a year since chip credit cards started to become commonplace in the US.

Depending on how many credit cards you have, you may have noticed that in the last year, more and more banks and card issuers have been forcing new cards on you. This all stems from a change in policy implemented by various payment networks on October 1, 2015. Previously, the liability for "card-present fraudulent transactions" was usually on the card issuer. Last October, that policy was changed so that when a counterfeit card made from an EMV chip-based card is used, or a transaction involving a "lost or stolen" card takes place, the liability shifted to the merchant. So you can see why the banks would want you to have all of these shiny new chip cards.


On Monday, with less than three weeks to go until we hit the anniversary of the liability shift, MasterCard released its data it has gathered in the past year. As of July, 88 percent of MasterCard's American consumer credit cards have chips, a 105 percent increase since the liability shift. Chip terminal adoption is up a whopping 468 percent to 2 million merchants, which represents one third of all American merchants. Perhaps most impressively, 1.3 million of the 2 million "chip-active" merchants are "regional and local merchant locations," but that makes sense since they would be hit the hardest by the liability shift.

"Since 2012, MasterCard has championed chip technology, " Craig Vosburg, president of North America for MasterCard, said in a press release. "We need chip cards in wallets and chip terminals at checkout to continue to drive card fraud out of the U.S. This country is one of the most complex markets in the world so we know things won't change overnight. However, we're encouraged by the significant progress over the last 11 months. With every additional chip transaction we move closer and closer to our collective goal—moving fraud out of the system."

When it comes to the average cardholder, though, there is some skepticism, thanks in large part due to how cumbersome they may be to use and to urban legends about the RFID technology in the chips. "Chip technology is the baseline, and RFID, in today's world, uses that technology," Chiro Aikat, senior vice president of product delivery, EMV, MasterCard, told Motherboard. "It's not the other way around. It's not that chip technology is RFID."

As it stands, counterfeiters can't duplicate the chip cards, which have dynamic, encrypted data that is always changing. Even if you stole the code and tried to put it on a magnetic stripe or even a chip, it wouldn't be recognized as legitimate when you try to use it. "That's the beauty of chips," said Aikat.

It appears to be working: MasterCard said that its "fraud data shows a 54 percent decrease in counterfeit fraud costs at U.S. retailers who have completed or are close to completing EMV adoption, when comparing April 2016 to April 2015." Taken all together, it's clear that this is working.

"As more U.S. cardholders use their MasterCard chip cards, they are learning the benefits of increased safety and security," said Aikat. "It's no small undertaking to change the way people pay for things. The only reason to start this big a task is to make people's lives better. Chips have the potential to do just that."

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