Introduction
While we have come a long way from cash transactions in the 1970’s to cryptocurrency today, one of the most revolutionary changes in payments technology probably was the introduction of EMV cards. First issued in 1993, EMV which stands for Europay, Mastercard and Visa has become the global standard specification for processing credit and debit card payments. A regular consumer can easily identify the EMV chip based cards due to the presence of the small golden squares on the left side of the card. These EMV chips have not only increased the security and convenience of card based payment transactions, but can also be embedded in other devices like mobile phones making mobile payments possible. As per latest reports from Visa, EMV chip technology has helped to reduce counterfeit card fraud by 76 percent. So what are the security features provided by EMV smart cards that make this Possible. In this article we try to better understand these features and how they work to make smart card transactions safer.
Security Benefits
- Secure card-present transactions with PIN: In most countries, EMV cards require the entry of a PIN after the card is presented at the POS terminal. As such, it is difficult for fraudsters to use fake, lost or stolen cards unless they have access to the PIN. Customers are expected to keep their card PIN’s to themselves and use PIN’s that cannot be easily
guessed by others. - Secure online payments: EMV chip transactions use a unique cryptographic code called a token for every transaction. This makes it very difficult for hackers to steal card holders data during the transaction. Since it is never repeated, stealing the code is useless for a
hacker. This is especially useful in online payment transactions on ecommerce websites, as it ensures the security of these transactions. - Data storage: EMV chips are capable of storing large amounts of data as compared to the older magnetic stripe cards. Thus they can store more information that is related to the card holders identity and can provide more data points for verifying the identity. As such
they can provide greater accuracy in authentication and identity verification thereby reducing the chances of fraud. - Encryption Keys: EMV cards carry security keys that are encrypted by the card issuer and cannot be accessed by unauthorized parties. This renders any attempts at card cloning
or skimming useless thus improving card security against fraud. - EMV + Biometrics: EMV chip card technology can be combined with biometric authentication technology to offer greater security. The biometric sensor may be embedded into the card that would read and verify the fingerprint of the card holder with that stored on the card. This has paved the way for the next generation of EMV cards with
even more security. Because of these security benefits, usage of EMV card readers has become a mandate in many countries. There may be a serious liability applied for merchants who do not support
EMV cards and are exposed to fraud. Ability to support contactless payments has made the use of EMV cards convenient for customers, and they expect EMV compatible card readers when they shop. Thus, EMV cards are not only a global standard but also create a win-win scenario for both consumers and merchants.