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PIN vs. signature: The difference between credit card transactions



By now you’ve surely heard about the EMV shift that has been well underway in the United States for the past year. However, you might not be aware of the differences between the two different types of EMV transactions: chip-and-PIN and chip-and-signature. Here, we break down those types of transactions and weigh their pros and cons.

Chip-and-signature EMV transactions

Chip-and-signature is the most prevalent form of EMV transactions in the U.S. Most banks and other financial institutions offer chip-and-signature EMV cards as their “go to” EMV card type. Chip-and-signature cards contain all the key characteristics of EMV technology, including:

A magnetic stripe

Fraud protection

Widely accepted by EMV terminals


What’s more, the chip-and-signature EMV process is quick, easy and familiar to credit card users: Simply insert the card into the terminal, allow the transaction to process and sign for your purchase. However, this does leave some wiggle room for fraudsters. While only one person—the authorized cardholder—should know his or her card PIN, anyone could theoretically forge a signature in a chip-and-signature transaction.

Chip-and-PIN EMV transactions

As you may have guessed, the chip-and-PIN card transaction is the more secure type of EMV transaction. In fact, the chip-and-PIN EMV transaction is considered the ultimate in modern payments security. This is because it is much more difficult, if not impossible, to “forge” a PIN versus the ease of forging a signature. If the customer doesn’t know the PIN, the transaction can’t move forward—stopping a would-be fraudster in his tracks.

Another benefit of chip-and-PIN cards is that some EMV terminals only accept chip-and-PIN EMV cards. So, armed with this type of EMV card, you can be sure to be able to make a purchase wherever you’d like to do so.

EMV migration marches on steadily

Business Insider reported that only 2 percent of U.S. card-present transactions were EMV compliant in 2015. This lag in adoption was attributed to card issuers (banks) reissuing volumes and trends and timing of merchant payment terminal upgrades to EMV technology. However, by summer 2016, MasterCard reported that 80 percent of their roughly 195 million U.S. credit cards now have EMV chips. Visa, the largest credit card company in the U.S., estimates that 75% of their U.S.-issued credit cards will contain EMV chips by the end of 2016.

Whether EMV transactions are of the chip-and-PIN or chip-and-signature variety, the added security of this technology is making the world a safer place for using and accepting card payments. If you haven’t already, work with your card processor to make sure your business is fully EEMV compliant so you can start accepting EMV transactions today!

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