Merchants and consumers often face the danger of data theft, so they demand a more secure and reliable approach to completing their payment operations effectively.
EMV (Europay, Mastercard, and Visa) is a joint technology standard, established in 1990s for processing financial transactions.
This technology uses advanced technology that helps to protect credit card information and was an effort to replace 1970s-era magnetic stripe (“magstripe”) thus improving payment security.
The Federal Trade Commission recently shared that more than 2.2 million payment frauds were reported in the United States last year. So more and more companies are implementing EMV solutions in their businesses to improve payment security and reduce the potential for payment fraud.
What Is EMV-A Detailed Overview?
EMV refers to Europay, Mastercard, and Visa, a standard for automated teller machines (ATMs), point of sale terminals (POS), and integrated circuit cards within the credit card industry.
In the 1990s, the EMV standard was adopted by European users due to prohibitively expensive telephone landline card authorization. It was started as a jointly developed global standard to facilitate the interoperability between the terminals and credit cards used by the largest financial services companies. Now, a consortium of financial firms is operating the norm known as EMV Co.
EMV cards consist of an integrated circuit chip, encoding every transaction differently. EMV standard also encompasses data and technological processing capabilities and physical aspects of devices and cards.
It is the greatest and most secure alternative to a magnetic stripe (magstripe) technology used in debit and credit cards to handle cardholder data. Magnetic stripe technology did not provide a high level of security as it was relatively easy to hack and reveal the private information of the cardholder.
EMV Card
An EMV (Europay, Mastercard, and Visa) card is a debit or credit card that contains an embedded microchip. Unlike traditional credit cards, EMV card has a reliable security loophole that can use in contactless payment, swiping, and dipping situations.
EMV card has a simplified and straightforward working process. Consumers insert their cards into an EMV card reader or chip-enabled terminal and wait for the transactions to be authenticated. EMV credit cards support contactless card-reading technology and Near-Field Communication (NFC).
A unique transaction number is generated when a consumer makes a transaction using an EMV card. The generated transaction number can’t be duplicated or reused, making the EMV standard more secure and reliable. The microchip of EMV cards significantly lessens the opportunities for hackers to steal sensitive information or cardholder data. Due to safe and reliable payment services, 3.5 merchant locations in the United States now accept chip cards.
EMV Payment Tokenization
EMV technology has become one of the most remarkable global initiatives to protect sensitive data and fight transaction fraud. Both parties-merchants and consumers can benefit from this recent global initiative.
The EMV standard support different security solutions, such as tokenization and point-to-point encryption (P2PE), to provide more realistic and secure transactions. EMV payment tokenization is a process of replacing sensitive cardholder data with an untraceable and algorithmic number.
It significantly lessens the security threats for online transactions without adding extra steps for cardholders. The payment tokenization feature of EMV software enables businesses to bring a secure and seamless payment checkout experience.
Types Of EMV Payment Transactions
A business using EMV software can issue payment tokens for different devices, including wearable devices and mobile wallets. The users can use these tokens for card-not-present and card-present transactions across various channels, such as online payment, in-store purchases, and in-app payment options.
EMV software can enable merchants to use the following options for payment transactions;
Card-Not-Present (CNP)
CNP payment options enable cardholders complete transactions without providing a physical credit card to the merchant. Cardholders can make NFC transactions through online, in-app, or mobile wallet payment options.
Contactless Payments
Contactless payment options are booming all over the world. Over the past few years, the revenue generated by contactless payment options has increased by 150%, which is expected to grow more in the recent decade. EMV standard also supports contactless payments to help businesses bring a seamless payment experience.
Chip And PIN Card
In chip-based card payments, the cardholders are asked to provide a PIN for successful transactions. EMV cards also encompass PIN transactions to make payment processing more secure.
Importance Of EMV Technology For Businesses
According to Visa, for merchants in the United States, who have upgraded their payment processing with EMV, counterfeit frauds were reduced by 80% from September 2015 to September 2018.
It reflects the convenience, safety, and reliability of EMV standards. The following aspects of EMV technology will help you understand why businesses should upgrade to this standard.
Guaranteed Authenticity
As mentioned earlier, EMV cards have a unique signature digital seal in the chip to prevent criminals access your data or use fraudulent payment cards.
Security Against Frauds
The EMV chip cards are effective in lessening in-store counterfeit payment frauds. It helps merchants develop a safer payment environment and reduce losses related to card-present frauds.
Better Information Storage
EMV chip cards store more data and information than magnetic stripe cards. They can work better for a longer period, becoming a greater representation of your identity.
Limited Business Liability
EMV technology uses a small electronic chip built into the point of sale (POS) terminals. The chip has secure keys to generate dynamic and unique cryptographic data for each transaction. EMV standard helps merchants reduce business liabilities related to counterfeit fraud.
Improved Customer Experience
Upgrading to EMV technology can help businesses provide customers with a seamless and smoother payment experience. A survey conducted by Worldpay and Socratic Technologies in 2018 revealed that 73% of the consumers in the U.S. reported an “outstanding” and “excellent” experience with chip-enabled credit cards.
Conclusion
EMV technology has the capabilities to reduce the security threats associated with online payment processing. Micro-chip-enabled EMV credit cards built on the point of sale (POS) terminals contain secure keys to make electronic processing more secure.
Edvantis — a leading company that provides reliable EMV software development services — can help your business upgrade with EMV technology and avoid potential threats to payment processing.
Ella Marcotte
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