First off, magnetic-stripe cards are pretty outdated, they’ve been around since the 1960’s. And surprisingly, the United States is one of the last countries to still have them around. EMV has been the standard in most parts of the world for decades (you may have noticed that chip cards are the norm when you travel to places like Europe, for example).

EMV cards are primarily designed to prevent fraudulent transactions that take place when someone physically swipes a counterfeit card at a payment terminal. And chip card technology works. In countries that have adopted EMV as the standard, certain types of credit card fraud have dramatically declined.

So what exactly helps chip cards fight fraud? Two key features:

They’re really hard to clone

Magnetic-stripe cards are, well, magnetized. When you swipe them, the payment processor reads their magnetic fields and matches them to your bank account information. The problem with this is that the data is static, making it easier for fraudsters to lift your information and clone it onto a new card. In fact, there’s something called a skimmer which they can get or make for as little as $20 that can do this pretty easily.

On the other hand, the data on chip cards is constantly changing, making it extremely hard to isolate and extract. To rip it off, someone would have to get into the physical chip circuit and manipulate things to get your bank information. Not only is this level of data surgery really difficult, but it also requires a set of high-tech equipment that can cost north of $1 million. That’s probably not the kind of cash your average fraudster has handy.

They’re cryptography-ed out

Magnetic-stripe cards broadcast bank information into the payment terminal as-is. Our readers keep this information safe by encrypting it as soon as it’s received. Chip cards are different in that they have sophisticated encryption built right into the chip. When you dip a chip card (it’s a dip instead of a swipe), it talks back and forth with the payment terminal in a secret language to make sure it’s actually you who’s paying.

The long and short of it? EMV and NFC are both much better ways to pay than magnetic stripe cards. And as a small business, you’ll be able to accept both. You can order your contactless and chip reader machine today. Plus, if you order one before Jan 15 2016 you will be receiving it for free!