A lot people take EMV Chip Card technologies for granted, accepting it as the method that we have to now use to create credit or debit card transactions. However not so long ago we were seeing our cards get swiped and signing receipts so as to make payments. So what's changed? What actually is EMV chip card technologies and why is advantageous for companies and consumers alike?
"EMV® is a worldwide standard for debit and credit payment cards based on processor card technology". The title EMV comes from Europay, Mastercard and Visa who developed the system we currently use for many cashless transactions. It had been established as a means of processing payments from cards which contain microchips that's why it's usually called'chip and PIN'. For those retail POS systems
that take it, the need for a personal PIN code serves as another layer of cardholder verification on an already protected procedure.
So what are the key differences between EMV chip & pin transactions and magnetic stripe swiping?
The most crucial distinction is the degree of information that is shared. When payments are processed using only the magnetic stripe, the only information that's really shared is your card number and expiry date. But when using EMV chip card technologies there's far more information shared and this requires much larger processing. The other distinction is the amount of security every method of payment provides your clients and your company. With favourite fraud methods usually constantly resorting to the weakest technology, magnetic stripe cards and transactions are the easiest target. Fraudsters have found they can use cheap card scanning devices to replicate the information stored on the magnetic stripes of cards. This means that they will have access to your card number and card expiry date. This practice is called skimming and has been discovered globally. It's very easy to do if at the point of sale you're requested to hand your card over for the cashier to swipe, as opposed to doing it yourself. When using chip and PIN to complete a payment, a special transaction code is made each time with a cryptographic key. It's this code together with the entrance of a personal pin code which makes stolen information less useful to thieves. The card details are only part of the information needed to be able to spend. Even if a thief was able to obtain card information, they wouldn't have the capability of producing a transaction code for in-store purchases. The POS device will check the usage of this card by piecing together and ensuring the validity of each the individual safety measures. As of now, many payment providers are already offering the technologies and our POS system already incorporates with best of these so you can select from a list of payment gateway providers which is most appropriate for your business.
What about safety for'card not present' (CNP) transactions?
Standard online fraud protection generally requests additional information in the kind of card or address security code verification. However some companies are taking this a step further in order to protect themselves and their customers from fraudulent transactions. The implementation of additional safety questions has become common for those companies which take payments from regular clients. Examples of the additional information they are asking includes date of birth, middle name or password that the cashier (for phone transactions) or system may then match to a client profile. Many online transactions are also protected by the systems set in place from the major card companies. These include 'Verified by Visa', 'Mastercard Securecode' and 'American Express SafeKey'.
Can Chip cards be used at retailers that don't support EMV technology?
Yes, they could. Your magnetic stripe can nevertheless be swiped, however you'll not have the additional security that accompanies chip-reading and entering a personal PIN code. However there are numerous changes approaching with respect to the processing of non-EMV tech payments. However in the USA, Mexico and Canada there are lots of changes approaching with respect to the processing of non-EMV tech payments. Keep an eye out for our article'How card payment accountability is shifting (US, Mexican and Canadian companies ) -- make your POS prepared for October 2015' for the info you will need to know.