EMV chip cards are quite widespread in use these days. This was a concept originally conceived by Visa, MasterCard and Europay. EMVCo LLC, a private company, defines and manages the EMV standard. Each of these companies – discover MasterCard American express visa, China UnionPay and Japan Credit Bureau, hold a 1/6th interest in this organization.
It is reported that these types of cards can make Credit Card processing transactions more secure. Find out how that is possible.
High level of encryption
As compared to traditional credit and debit cards, these are regarded as more secure. The account details that are stored on the cards are encrypted in a unique way – every time that it is accessed. Thus, potential financial fraudsters find it tougher to access the useful bits of information from EMV chip cards. Traditional credit and debit cards data is stored statically in magnetic stripes.
Credit and debit card transactions are primarily of two types:
- Card present transactions
- Card not present transactions
In Card Not Present transactions, frauds cannot be prevented by the EMV chip technology. Fraudulent activities cannot be stopped by an EMV chip, if a criminal has the details necessary for conducting online transactions.
However, in case of Card present transactions, instances of fraud can be reduced significantly with the help of EMV chip technology. With skimming, regular credit and debit cards can easily be read. Once this kind of a card is skimmed, fraudsters can easily use a duplicate of the same, with the same details contained in the magnetic strip. That is not the case with EMV chip technology cards.
Stronger authentication technique
When compared to do a signature and magnetic stripe combination, a PIN and a chip offer a more mathematically robust technique of authentication. Forging a signature is tough but stealing a pin is tougher. A Triple-DES unique key is needed by every EMV card, along with any of these three data encryption and secure embedded card authentication schemes:
- Dynamic data authentication
- Static data authentication
- Combined data authentication as well as a competitive sale terminal point
In 2011, in a research published by the UK Cards Association and Financial Fraud Action UK, it was revealed that counterfeit fraud losses reduced by as much as 63 % in the 2004 to 2011 period after EMV chip cards were introduced, and began to be accepted and used widely. In most countries of the world, these cards have been adopted widely. However, the US has been slow to its adoption – mainly due to the costs of implementation involved.