What is EMV?

emvEMV is an acronym for Europay MasterCard Visa. EMV is a joint global standard for acceptance of chip-cards, chip payment applications and devices plus chip payment procedures.

Cardholders and merchants may be familiar with chip and pin, another term for EMV. EMV is transaction processing using the highly secure chip embedded in the card versus the magnetic stripe. EMV employs two technologies to read and process the chip transaction, contact and contactless, NFC (near field communication).

Contactless EMV is when a cardholder waves the card within 3” to 4” of the reader’s antenna as noted on the terminal or reader. Transactions process after cardholders remove the chip card from the contactless field.

For contact EMV, the cardholder inserts the card into the reader. EMV contact readers update the chip with each use, reading then writing date to the chip.

In both examples, the embedded microchip sends the card data to the POS system, replacing the magnetic stripe.

Still, banks may issue cards with a chip and magnetic strip for cardholder use where merchants have not updated to EMV.

Why EMV?

By employing EMV, the rest of the world reduced fraud losses dramatically. Lower fraud losses aid in controlling the cost of doing business for all the stakeholders, including merchants.

Merchants benefit from fewer charge-backs by using terminals that process chip transactions. The merchant is not financially liable for the cost of specific fraud transactions when cashiers follow terminal displayed directions. Cashiers must also follow the business’s routine security practices.

Chip cards reduce the potential for errors and losses because they stop reconciling paper. Transaction records for chip card payments are completely electronic. Chip transactions speed customers through check out since it does not rely on sales associates to make difficult judgments about signature accuracy. Sales associates simply follow terminal prompts.

American Express, Discover, MasterCard and Visa have adopted chip card for the last remaining market, the United States, by October 1, 2015. Because of the mag strip technology investment by US merchants, the card associations specify interoperability into some future time. Interoperability is the acceptance of cards with a chip and magnetic stripe.

The card issuers – banks, credit unions and others, are issuing chip cards now. Foreign travelers on vacation or business in the United States bring chip cards from Europe and Asia and other regions. Many of these cards have NO, magnetic stripe and NO embossing.

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