EMV chip technology is named after its developers, Europay, Mastercard, and Visa. It is a technology which utilizes embedded microprocessor chips to securely store cardholder data. It has become the global standard as it allows safe and secure credit card processing worldwide. The chips are embedded in several different products, including widely used debit cards and credit cards.
How does this form of payment processing work?
EMV payment processing works by enhancing security and reducing fraud. It does this by:
1) Creating unique data with each card transaction – since no two card transactions result in the same data, it is more difficult for fraudsters to make counterfeit cards. The data cannot be used for future transactions as it will not be authentic.
2) EMV will usually have user verification requirements, such as a pre-set PIN.
3) EMV technology authorizes each card transaction using the card issuers defined rules.
What kind of technology is required to accept EMV chip cards?
EMV chip-enabled cards require the use of terminals that allow you to insert the card for a few seconds. New machines present an unexpected investment; however, it is an investment that can protect a business from fees associated with data breaches that EMV payment processing can prevent.
Credit card processing is important for many businesses, and ensuring payments are secure is even more important. EMV chip-enabled cards can still be used by swiping and entering the card number to make purchases. It is important to discuss the EMV system with all employees who handle transactions. Ensure employees know to always process EMV chip-enabled card transactions using the EMV terminal by putting the card in, rather than swiping or entering the card number. This is the best way to utilize the protections offered by this technology.
How long has the EMV microchip technology been around?
EMV microchip technology has been around for many years. It was utilized in Europe widely between 2004 and 2011, and a study published at the time reported that EMV technology reduced the occurrence of credit card fraud by a whopping 63%. The US was a late adopter of the technology after being ranked the number one choice for committing credit card fraud. In 2015, the US decided to adopt the technology and it has been used broadly since then. It has reduced the percentage of point of sale credit card fraud.
Does this technology prevent against fraud online, mail order and/or over the telephone?
Unfortunately, the EMV microchip technology only works to reduce fraudulent activity when inserted into the proper payment processing device. While it cannot help to deter card fraud through other methods of payment, the major financial services corporations such as Visa and Mastercard have developed other ways to deter fraud in these situations. Some of these methods include Verified by Visa and Mastercard SecureCode. These methods can help reduce fraudulent activity when the card is not present. Perhaps one of the best methods that has been developed is creating a temporary card number that can be limited to a specific dollar amount for use in lieu of the actual card number. The temporary card can only be used once, and therefore is a good way to reduce risk of fraud.
