EMV chip card technology is a new standard in payment processing created out of a necessity for a higher standard in the transmission of cardholder information. While some countries have already adopted the standard which now lies in high international use, the United States is still in the process of implementing the standard into wide use. Understanding the benefits of EMV technologies ensures that consumers will stand behind the major improvements that prevent many of the common problems with the current system.
EMV stands for Europay, MasterCard, and Visa. The standard features the use of embedded microprocessor chips that contact cardholder information within them. Many experts refer to this technology either as “chip and PIN” or “chip and signature.”
One of the largest benefits of the new EMV standard is the increase in card-present technology. While traditionally purchases have been made with a single swipe of a card followed by either a signature or a PIN number being used to identify the owner, the new strategy involves the scanning of the chip. This ensures the card is present during the process of the transaction. Through either a signature or the use of a PIN number, the cardholder can also prove their identity as the owner of the card.
The most common scam with credit cards involved skimming a credit card. While the cardholder may be using their card at an ATM or an automated payment processing terminal, many scammers would develop technologies to sit on top of the scanner in order to steal the details of the credit card. Additionally, another piece of equipment would sit on top of the key pad to steal the PIN number of the credit card. This often led to the creating of a fake card that could then be used to make purchases without the consent of the cardholder.
As more time passes more retailers and stores will start to use credit card terminals that utilize the features of chip and pin transactions. Banks will also start to provide their clients with access to EMV cards to be able to utilize the new credit card terminals. With EMV becoming a more accepted standard, it will become essential for businesses large and small to adopt the new technology otherwise they may face scrutiny of their clients.
Card Not Present Situations
While EMV cards work great for card present situations, most scams and scammers will start to migrate towards targeting situations where a card is not present. Many predict the rate of online scams will increase as there is no way to prove the existence of the card in online transactions. There are a number of strategies that online retailers can take advantage of to prevent fraudulent charges and misuse of others cards and credentials.
It will become increasingly important for businesses to ensure their business is utilize EMV compliance solutions.