EMV is an industry standard designed to help fight fraud for smart payment cards and for payment terminals and automated teller machines that accept them. EMV cards are smart cards (also called chip cards or IC cards) where the 'chip' in the card is actually a secure microprocessor, similar to chips in payment devices like a mobile wallet on a smart phone.
How does EMV work?
The chip generates a unique number for each transaction. When used with a chip-enabled POS system, transactions are more secure. The chip cards, and the chip-enabled POS system, work together to form a system that helps reduce counterfeiting.
Standing for “Europay, Mastercard, and Visa”, EMV is a more secure way to protect card users from being targeted by fraud. America is one of the last major countries to adopt EMV. The complete adoption process will take several years.
How do these chips protect the information?
Magnetic strips were invented in the 1950’s, and have remained the standard since. In the US the current standard is for customers to swipe their card and sign the receipt. The magnetic strip provides a small amount of protection; however the latter process of signing a paper receipt is far less scrutinized.
In comparison, the EMV process requires the scanning of the chip and the entry of a four-digit pin, much like a debit card, that is more secure.
Will chip cards help prevent fraud?
No technology is foolproof. But chip cards can help reduce fraud from counterfeit, lost, or stolen cards and potentially reduce the number of chargebacks.
Why should my business invest in a EMV chip reader?
By accepting EMV enabled credit cards you’re not only protecting customers, but your business as well. Some companies have already begun to issue credit cards with chips to standard users. Many EMV cards also have magnetic stripes for backward compatibility during the upcoming years of transition.
Are there any downsides to EMV credit cards?
As with any new technology, there is an investment cost associated with upgrading to an EMV terminal. In addition, it may take time for customers to get used to the new process of checking out with new EMV cards and that could increase checkout times.