Microchip-Embedded Credit Cards Coming To America At Long Last

Two companies kick off a race to market with EMV chip cards, long a staple in Europe. But with NFC payments on the rise, this seems less like innovation and more a stopgap measure.


American credit card companies may be taking a page from Europeans. At least two companies say they plan to to experiment with chip-embedded cards like the ones used abroad.

If you’ve traveled in Europe, you’ve probably noticed that credit cards differ there–most use an embedded EMV chip. Yesterday, Wells Fargo announced it would be testing similar cards in response to complaints from American customers who had traveled abroad and faced difficulty. It will notify 15,000 frequent-traveling customers that they’re eligible to try out the program. EMV cards could arrive as soon as this summer, according to The San Francisco Chronicle, which also made it seem as though the U.S. is downright backwards for still relying on the classic magnetic strip: we’re “among the last developed nations” who have spurned EMV, dismissing it as though it were just another quirk of that whole silly metric-system-using rest-of-world.

JPMorgan Chase & Co. hurried to respond to Wells Fargo’s announcement, claiming that they, in fact, and not Wells Fargo, would be the first to issue a chip card. They will be unveiling a card in June, and targeting their wealthiest customers, since the chip card will initially be available only on the Palladium card, which has a high annual fee. JPMorgan may well have had this plan in the works for some time, but their response smacks a tad of copy-cattism; a press release issued yesterday misspelled EMV as EVM. A Wells Fargo spokeswoman told Bloomberg the company welcomed the competition.

The incentives for companies to make these cards are obvious. Credit-card acceptance issues abroad cost 4 billion dollars in missed transactions in 2008, or about half a billion in revenue for card companies, says the Columbus Dispatch, citing a 2009 study by Aite Group. The name “EMV” comes from the three companies, Europay, Mastercard, and Visa, that helped develop the chip standard, added the Dispatch. JPMorgan’s cards will include the microchip together with the magnetic stripe, meaning the cards will work on both sides of the pond.

We wonder, though, if this headlong rush towards credit-card innovation amounts to a bunch of misspent energy. Chip cards are all well and good, and there’s surely more than a few things we can learn from the Europeans. But aren’t we all more excited by the real wave of the credit future–wireless credit card payments using NFC?

[Images: Flickr user pnoeric; Wikipedia user Hywel Clatworthy]


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David Zax is a contributing writer for Fast Company. His writing has appeared in many publications, including Smithsonian, Slate, Wired, and The Wall Street Journal.