How the 'Faster' Chip Credit Cards Actually Work

You know how that new chip credit card your bank sent you seemingly takes forever to process while you’re paying at a register? Visa is trying to speed things up.

The network announced earlier this week that it is rolling out new technology — billed as the Quick Chip — that enables cardholders to dip and remove their EMV chip card from the terminal, typically in two seconds or less, without waiting for the transaction to finalize. Previously, cardholders had to wait until their purchases were tallied, dip the chip and leave it in the terminal until their transaction got approved.

Visa’s new tech works similarly to contactless cards, which communicate with a card reader via a radio frequency (RF) interface and, as such, don’t need to come into physical contact with it.

“The principles that underlie the Quick Chip specifications are similar to how contactless chip transactions are streamlined for speed so the industry is familiar with approach,” a Visa spokesperson said in an email. “For example, both contactless chip and Quick Chip processing do not require the chip card to wait for the issuer’s authorization message, which eliminates the need for the card to remain in the terminal throughout the transaction process.”

The Quick Chip upgrade is available free of charge to payment processors, acquiring banks and other payment networks to offer to merchants. It’s up to these providers to determine what costs, if any, there may be for merchants.

“The solution can be implemented as a software upgrade to existing terminals in stores or as an integrated enhancement to new terminal solutions,” Visa said. “In either case, Quick Chip does not require any new or additional Visa or EMVCo certification or any investment in hardware. There are no changes or impacts to EMV chip cards.”

The Skinny on EMV

Traditional magnetic stripe credit and debit cards have been steadily giving way to EMV-chip enabled versions since new network liability rules went into effect last October. The rules essentially require whichever party (either the financial institution or the retailer) that hasn’t upgraded their technology (either the card itself or the reader) to cover the cost of any in-store fraud that might occur. Prior to that, financial institutions generally paid for the fraud.

The chips carry a security code that changes each time the card is used, so they’re generally much harder to counterfeit than their stagnant magnetic stripe counterparts. Some merchants have yet to flip the switch from stripe to chip (you can go here to find out more on why), but it’s still a good idea for consumers to use their new EMV cards wherever they can — even if Visa’s quicker version has yet to be implemented.

The network said at some of the top merchants that implemented chip last year, there was an 18% decrease in counterfeit fraud from October to December 2015.

Of course, EMV chips aren’t a failsafe when it comes to credit card fraud. They won’t do much to help you if your card gets compromised and is used for online purchases, so it’s still important to monitor your financial accounts for suspicious activity. You can also monitor your credit if you have reason to believe your personal information was stolen alongside your payment numbers. A sudden drop of credit scores, for instance, is a sign your identity has been compromised. You can view two of your credit scores for free each month on Credit.com.