2016 saw a looming deadline for a transition to EMV cards—but what are they really? And even more, are they really more secure?
In a word, yes.
EMV actually stands for Europay, Mastercard, and Visa: three organizations that teamed up to take down credit card fraud—or at least try to! EMVs contain a microprocessor that protects your data during a transaction in ways a traditional magnetic stripe will not.
The technology is designed to reduce card fraud resulting from counterfeit, lost, and stolen cards. EMV also provides interoperability with the global payments infrastructure. In other words, consumers with EMV chip payment cards can use their card on any EMV-compatible payment terminal worldwide.
The technology also supports enhanced cardholder verification methods and, unlike magnetic stripe cards, EMV payment cards can also be used to secure online payment transactions.
According to emv-connection.com, EMV cards are more secure in three particular areas:
During a transaction, an EMV card is authenticated, and unique data is also created, recorded, and stored, as to combat discrepancy with new (or suspicious) transactions in the future. The validation is executed by a dynamic cryptogram or by using Static Data Authentication (SDA), Dynamic Data Authentication (DDA), or a DDA combination.
Cardholder verification—the process of correctly identifying a card owner—seems pretty straightforward, right? Well, EMV-equipped cards actually support FOUR different cardholder verification methods (CVM). These methods encompass online and offline PIN numbers, signature, or no CVM. No CVM is typically used for low-transaction devices.
Online authorization of transactions is sent to the card issuer with a transaction-specific cryptogram. At this point, the card issuer either accepts or declines a transaction based on the data received.
Offline authorization of transactions requires communication between card data and the issuer. At this point, the card issuer must observe a set of parameters assigned to the card to determine whether a transaction may be authorized or declined. However, offline authorization is less common—exclusive to places without online connectivity or places where telecommunications costs are too high to authorize online.
So yes, this is all very technical, but then again–what else would you expect from a computer chip? EMV is here to guard your wallet. Are you ready to jump?
We know your business is very important. So why would you want to be held liable for fraudulent purchases? Call us today at 856-825-6000 to learn about our merchant services.