As Credit Card Tech Evolved, Some Would-Be Hiccups Never Happened

It may not seem "futuristic" these days to dip or tap a credit card instead of swiping it, or to hold a cell phone over a payment terminal to cover your groceries.

But in the U.S., you only have to go back about 10 years or so — before EMV chips and contactless technology became standard on credit cards — to find a different world, where those now-commonplace features would have been perceived as unusual, confounding and potentially even unsafe.

A lot has changed in credit card tech since 2015, though the average cardholder has proved to be a quick study.

“American consumers have adapted remarkably well to these innovations,” said Seth Perlman, global head of product at i2c Inc., a global provider of banking and payment solutions. He added, however, that "the process hasn’t been without its challenges.”

Learning curves aside, many hurdles that had been widely expected never actually materialized for cardholders — and, with the benefit of hindsight, seem a little silly now.

Dipping wasn't so hard

One notable card advancement in the U.S. over the past decade was the proliferation of EMV-enabled cards. Those initials stand for Europay, Mastercard and Visa, the companies that developed the tech. Introduced as a way to mitigate credit card fraud, EMV chip cards feature a small microprocessor that generates encrypted data and requires consumers to insert (or "dip") their card into a card reader, rather than use the old method of swiping a card that stored data on a magnetic stripe on the back.

EMV chips had already been in wide use in other parts of the world; Europe, for instance, was already well-acquainted with the technology. But EMV didn't really start taking hold in the U.S. until about 2015. And one big question was: "Will cardholders know what to do now at the register?" Hand-wringing commenced. Flowcharts were created.

But it turns out we took dipping in stride. As of 2022, 69% of all issued cards were EMV-enabled, and 93% of all global physical card transactions used EMV chip technology, according to data from EMVCo, which manages EMV technology.

“As merchants upgraded their point-of-sale systems and card issuers refined the technology, consumers quickly grew accustomed to the enhanced security and peace of mind that EMV provides,” Perlman said.

Going 'chip-and-PIN-less' became painless, mostly

During those early years of EMV use in the U.S., a common refrain was that Americans probably needed to carry a card with "chip-and-PIN" capabilities when traveling overseas. That was because of a difference in how cardholders verified their identity at the point of sale.

In the U.S., you dipped or tapped your card and then signed your name (at least sometimes). But in Europe and elsewhere, you dipped your card and then often entered a PIN. That might, for a time, have been problematic for U.S. cardholders, who typically have no PIN and thus might have been unable to verify their identity at, say, an automated train kiosk in a different country. The worry was prevalent enough that some card issuers used to prominently advertise "chip-and-PIN" as a travel card benefit.

But technology has caught up, and international acceptance of both “chip-and-signature" and chip-and-PIN cards is fairly widespread today. Even unattended terminals overseas will generally support transactions without requiring a "CVM," or card verification method.

Relatedly, many U.S. payment terminals no longer require a signature at all.

It's still advisable to pack an extra card when traveling internationally. But that's more to guard against the loss or theft of your primary payment method, or as a backup in case the merchant doesn't accept your American Express or Discover card. That's still a thing.

Paying with your phone? Easy call

Mobile wallets, virtual card numbers, and buy now, pay later apps weren't especially prevalent in 2015. But the use of those kinds of digital payment technologies has accelerated over the past decade, driven in part by the desire for contactless payment options during the COVID-19 pandemic.

Today, 92% of consumers in the U.S. report having made some type of digital payment over the past year, according to a 2024 digital payments survey by McKinsey & Co., a global management consulting firm.

That's not to say it's been a smooth path. Consumer adoption is one thing, but some data suggest that businesses have been slower to adjust. In a 2024 merchant services satisfaction study conducted by J.D. Power, for instance, only 57% of small businesses in the U.S. said they accept digital wallets, compared with 94% that reported accepting physical cards.

It's also not to say consumers themselves had no initial trepidation about digital payments. Questions abounded: Can it really be safe to pay with a cell phone? Won't I miss out on my credit card rewards when I use this method?

In truth, paying with a mobile wallet is quite secure thanks to the process of tokenization, which protects a cardholder's real credit card number and instead sends encrypted data that’s unique to each payment.

And while at first there may have been some hiccups in terms of earning credit card rewards via a mobile wallet payment, it's now mostly a non-issue. In fact, these days many credit cards actively incentivize the use of mobile wallets, offering bonus rewards when you choose to pay that way.

Similarly, the convenience of instant virtual credit cards (aka immediate access to your credit line) and the flexibility of buy now, pay later services have proved to be popular features for consumers.