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Credit card encryption is a measure of security used to thoroughly protect the credit card user's data when making purchases. See also Encryption. The process involves protecting the card being scanned, the device or terminal being used to scan the card, as well as any and all communication between the terminal or device being used and any supporting computer system which may receive the credit card or user's data. The process is an essential step in protecting credit card users against theft of information. Classic methods of credit card encryption include magnetic strips, PIN numbers, electronic chips, and the CVV security number on the back of a card.^[1]

While forms of credit or loan-based payment have existed throughout history, many historians trace physical credit cards back to the Diners Club International, founded in the 1950's, who provided the first general credit card available for use with multiple retailers.^[2] Between this time and up to the 1990s, all credit and debit card transactions were processed in one of two ways: 1) via the magnetic stripe on the back of the card, developed in the 1980s^[2] or 2) through a physical imprint of the raised numbers and text on the front.^[3] While the method of taking a physical imprint of a card has mostly fallen into disuse, magnetic swipes are still far and away the most common method for processing transactions in the U.S, which boasts more credit card use country-wide than anywhere else in the world. According to Experian's State of Credit report in 2017, "the average American held 3.1 credit cards with an average balance of $6,354—plus 2.5 retail credit cards with an additional balance of $1,841"^[2][4] This extreme level of use has also led to an extreme level of fraud, as debit/credit card fraud losses in the US overtook combined payment card fraud losses worldwide in 2013^[5], notably before the country had adopted the widely-used and developmentally more secure EMV system.

See parent article EMV

EMV is a widespread and commonly used form of credit card encryption, known as the chip. It refers to a "jointly developed global standard that allows interoperability between the cards with computer chips and terminals used by the largest financial services companies", and today it is a technology toolbox used to support interoperability across both in-person and remote transactions.^[6] EMV was developed originally in the 1990's as a solution to the prominent issue of credit card fraud, to improve upon the standard magnetic strip protection. ^[7]