By the end of 2015, banks and merchants were required to have replaced all debit and credit cards with the new “Chip & Pin” (or EMV) cards. The new cards have a small, fingertip-size chip on the front, but many still have the magnetic strip on the back as well.

The driving force behind this change? EMV cards are more secure because they make it harder for hackers to steal information. These cards have been in use in most of the rest of the world for years. After implementation, those countries found that cases of fraud dropped dramatically.

“EMV” stands for Europay, MasterCard, and Visa, the three companies that originated accepted standards for the technology. Basically, these “smart cards” store data on integrated circuits instead of magnetic strips. To use them, you insert the chip end of the card into a reader. Some readers require a PIN or signature, but many of the newer ones do not. Leave the card in the reader until the transaction is approved, remove it, and you’re done!

A Brief History of Credit Cards

In the early 1900s, merchants began issuing their own printed-on-paper “loyalty” cards, a little like grocery stores and movie theaters do today. The first widely used and accepted “credit” card was Diners Club. Created in 1950, it was cardboard instead of plastic, and had to be paid in full at the end of every month.

By 1951, there were 20,000 Diners Club cardholders. Spurred on by the success of Diners Club, American Express issued the first plastic card in 1958.

Baby Boomers will remember the old countertop “zip-zap” machines that imprinted the raised numbers of the plastic card onto a carbon paper receipt. To check if the card was legitimate, cashiers were supposed to refer to a printed booklet that contained long lists of stolen or invalid credit card numbers.

Considering the lightning speed with which transactions take place today, that lengthy procedure sounds like the Dark Ages.

America is Catching Up

As of October 2015, while 40 percent of U.S. consumers had EMV cards, only about 25 percent of merchants were EMV compliant. Even today, there are some places that have the EMV machine, but haven’t implemented the complete technology and software to use it. Those locations have an incentive to be updating ASAP, however. If a consumer experiences fraud because the merchant couldn’t process the “chip” card, the merchant may now be held liable for any damages.