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Just as Visa, Discover and MasterCard have already done, American Express last week announced how it will add EMV chip and PIN cards in the U.S. market, laying out its roadmap for merchants, processors and issuers of American Express-branded cards.

American Express plans on issuing EMV-compliant cards in the U.S. during the last half of this year. These cards, also called smart cards, have an embedded chip on them that's actually a small microprocessor containing the cardholder's information. The information on the chip is protected through a variety of methods. When used as a traditional method of payment, the card is inserted into a reader and the cardholder enters a PIN to verify they are the person who owns the card. 

EMV cards can also be used for contactless payment, which entails holding the card within inches of a contactless reader. The reader communicates with the chip in the card to transfer the payment information and attach it to the transaction at hand. EMV technology can even be used in conjunction with mobile payments.

Chip and PIN cards are common in other parts of the world, and the technology is now coming to the U.S. to replace the magnetic stripe cards. The cards offer better security than a magnetic stripe, and with the ability to make contactless payments, they can make the payment process faster.

In order to use this technology, merchants, issuers and processors need to invest in the equipment necessary to make the cards and accept payments. With regards to the American Express brand, the company has set dates for these companies to comply with implementing the technology.

The first date in American Express' roadmap is April 2013, when processors will need to be able to support American Express EMV chip-based transactions for contact, contactless and mobile payments.

Six months later, in October 2013, merchants that have enabled processing of EMV chip- based contact and contactless transactions will be eligible to receive relief from PCI Data Security Standard reporting requirements. These requirements ensure the security around payment cards.

Finally, in October 2015, American Express will enact a Fraud Liability Shift policy that benefits those parties that have the most secure form of EMV technology in the event of a fraudulent transaction. Gas stations will get an additional two years to meet these requirements for transactions that occur at the pump.

"The payments industry is continuing to evolve rapidly, and American Express recognizes the growing demand for chip-based contact and contactless payments in the U.S.," said Suzan Kereere, senior vice president and general manager, American Express Global Network Business, in a statement. "We also fully recognize the complexities involved in migrating to EMV chip-based technology, and our first priority is to provide choice and flexibility for merchants and our card-issuing partners so they can adopt the EMV solution that best meets their needs."

"As a global payments network, we understand the benefits associated with EMV-based technology, and we are committed to continue enhancing security at the point-of-sale for both merchants and American Express Cardmembers," said Kereere.

EMV technology comes from EMVCo, the company responsible for managing, maintaining and enhancing the specifications of this payment technology. American Express is one for the four members of EMVCo. Along with JCB, MasterCard and Visa, it has a quarter-share of equity in the organization.

On a global scale, American Express has already implemented EMV technology and has processed millions of payments using this technology. Incorporating it in its offerings in the U.S. will expand its level of card security in this market.

EMV cards are popular in many other portions of the world, and the U.S. is one of the last countries to migrate to the new technology. Some Americans travelling abroad may find that they can't use their traditional magnetic stripe cards at some establishments because the merchants no longer have card readers that read magnetic stripes. With the addition of the technology in the U.S., Americans will be able to use their cards more easily in other parts of the world.