What is EMV and Is It Necessary?
The EMV chip is the latest global standard in card payment security. The name EMV was formed as an acronym of the three-card payment companies that created the system. These are Europay, Mastercard and Visa. While many other card payment companies have come on board and are using the system, the name EMV is universally accepted. American Express, JCB, Discover, China Union Pay, and others also use the EMV card system. The main difference between the EMV cards and the conventional credit or bank payment cards is a smart chip. EMV cards are equipped with a metallic smart chip that contains your banking information. The conventional system stored your financial information only on black magnetic strips found at the back of the card, which EMV cards typically also include.
How Do The EMV Cards Work?
The EMV system was introduced to provide extra security and to cover various loopholes in the magnetic strip system. The main challenge of the magnetic strip card system was the method in which financial information was stored. The magnetic strips contained coded data that would communicate your banking information through the card reader every time your card was swiped. Your primary banking details on your card’s magnetic strip would remain the same for every transaction. Fraudsters found several ways to capitalize on the magnetic strip’s vulnerabilities. Some would steal the cards while others found ways to clone cards without your knowledge. The EMV system, however, generates a unique transaction code each time the card is used. This makes it impossible for a card cloning system to work. If your EMV card is cloned, the transaction code will expire before the fraudster can use it. The method used to generate unique transaction codes through your EMV chip card is called tokenization. With a tokenization system, your account details are never transferred digitally. The system encrypts your details in a token vault and sends a randomly-generated code in place of your private details. The process of encrypting and decrypting your transaction details can take up to a few seconds. This is the cause of the delay you may experience when processing EMV payments.
Is The EMV System Necessary?
The magnetic strip card payment security system had suffered breaches in the years preceding EMV deployment. These breaches resulted in significant losses both for individuals and financial institutions. The EMV chip cards provide unmatched security against card payment fraud. In a recent report, Visa announced that as of May 2019, the EMV chip technology had reduced counterfeit fraud by 76%. Also, since the EMV cards use a global standard system, it allows you to use your card in multiple countries. This can increase your flexibility and buying power when you travel. EMV compliant businesses show that they value their customers’ security during transactions. The EMV chip cards offer immense benefits for both merchants and individual consumers. Vendors that don’t have EMV compliant card readers at their points of sale could be putting their customers at risk of fraud.
For more information on EMV cards and whether they are necessary, or to sign up for a merchant account, please call (888) 924 – 2743 or go to Charge.com.
