Understanding EMV Chip Card Technology.
Information security is critical to running a business successfully. Keeping customer information safe and secure is crucial for the reputation of a business. Let’s understand how Europay MasterCard and Visa (EMV) chip card technology works to secure your sensitive data.
What is EMV?
A credit card payment system, EMV stands for Europay, MasterCard, and Visa. A tiny computer chip stores a little bit of encrypted credit card information on the card in order to authenticate chip card transactions. The data stored on the chip has to be decrypted before it can be read. This makes it a lot more difficult for fraudsters to breach the security of credit card transactions and make counterfeit cards. All merchants must comply with EMV technology (since October 2015) to protect consumer data, prevent fraudulent activities, reduce the cost of fraud, and improve payment security.
For merchants and financial institutions, EMV involves upgrading in-store technology and processing systems that comply with new liability rules as a means of protection against fraud.
How Does EMV Processing Works?
Every time an EMV card is used, a unique transaction code is automatically created, which cannot be reused. In the event of theft of the chip information, there would be no card duplication, as the stolen transaction number cannot be reused and the transaction would just get rejected.
Though it is not possible to prevent card or data breaches with EMV, it will certainly become harder for fraudsters to acquire sensitive data and indulge in counterfeit activities.
EMV cards are designed with EMV and the standard magnetic strip, making it even more secure than traditional cards. The cards comprise information about the cardholder and card issuer.
Statistics reveal that with the adoption of EMV chip card technology, domestic fraud has significantly dropped in the UK over the years since 2002. These cards may be chip and signature or chip and PIN. As far as chip and PIN cards are concerned, these operate like debit cards, which means every transaction requires a unique PIN. Consumers insert the card into the merchant’s payment processing terminal to complete the transaction by entering a PIN.
The system can also work with near field communication , wherein there is exchange of information wirelessly between the card and the terminal, that is, the encrypted data in the chip flows to the cardholder’s financial institution. The transaction is completed after the card issuer reviews the data, verifies authenticity, and authorizes payment through the terminal. On the other hand, chip and signature cards require only a signature for the completion of the transaction.
What Must You Know about EMV as a Business Owner?
- Any merchants that have not adopted EMV chip card technology are liable for any card-present fraudulent purchases in their store.
- Merchants are responsible for paying for an EMV capable sales terminal. Make sure that you compare prices and pay for the best machine.
- Merchants have to be certified by EMVCO and all of the card issuers chosen by your business.
- Certification may take as short as a couple of weeks or as long as eight months.
- The cost of certification depends on the business size.
Read my last post titled, “EMV Capable Terminal – To Lease or Buy? Don’t Get Scammed!” BEFORE you get a new EMV capable credit card or POS terminal. Chances are you may get scammed into paying for something that may not work for some time.
Don’t lease an EMV credit card terminal. Buy it for about $200.
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