EMV is a secure payment technology standard used across the world. Named after its original founders in 1994, EMV is short for Europay, Mastercard, and Visa. It is managed by a handful of credit card networks including American Express, Visa, JCB, Discover, China UnionPay, and Mastercard.
EMV card processing leverages cutting-edge fraud-reducing technology that helps protects merchants, consumers, and card issuers against losses from the use of stolen or counterfeit cards at the Point of Sale (POS). Embedded smart chips or microprocessors interact with the merchant’s Point of Sale device to ensure that the credit card indeed belongs to the person using it. These smart chips add layers of security against fraud. Moreover, this chip technology is impossible to duplicate. In order for the payment to be accepted, the customer must provide a signature or a PIN.
The importance of having a secure payment processing system like EMV can be understood by the fact that the U.S. makes only 24% of all credit card sales. it is responsible for nearly 50% of fraud worldwide. The fraud losses run into billions every year.
It has been proven that EMV payment processing has definitely made transactions more secure and helped reduce fraud. According to Barclays, in the United Kingdom, there has been a 70% drop in fraudulent credit card transactions since chip credit cards have been deployed.
In the United States, for those merchants that accept EMV cards, it has been reported that counterfeit fraud losses decreased by over 87% in March 2019 compared to September 2015, before the liability shift.
How does EMV card processing work?
EMV technology is simple and straightforward on the consumer’s end. While the older credit cards had a magnetic strip that was swiped, in the case of EMV cards, one end is dipped into the reader to scan the chip. It is essential that the POS where the credit card is used is equipped to read and communicate with the chip.
For every transaction, the chip generates a unique code, which cannot be used again. On the contrary, in the case of a magnetic stripe card, the data can be easily copied by a card reading device and counterfeit cards can be produced.
When using an EMV card, you do not provide your signatures to authenticate the transaction. Instead, you provide a PIN, which acts as an additional layer of security.
Contactless EMV cards use the same security technology, but they are even easier to use and the transactions are super-fast. All you need to do is tap the card on the POS device and that’s all. The transaction is complete.
Top reasons to enable EMV card processing
- The primary benefit of EMV card processing is that it significantly reduces the risk of fraud and makes both offline and online transactions more secure. Data from a traditional card can be easily copied using a card reading device, but the EMV technology does not allow this.
- EMV card processing technology not only prevents fraud in the merchant account but also protects the consumer by providing a safe payment experience.
- With EMV technology, you can avoid liability costs and potentially save a lot of money in the long run.
- EMV transaction times have come down from 7-10 seconds to almost instant. Contactless transactions are 53% faster than magnetic stripe card transactions.
Today, magnetic stripe technology has become archaic and EMV technology has achieved almost 100% coverage across the United States and Canada. Chip cards issued in the United States work in any EMV country in the world.
Do you have questions about whether EMV card processing is for you? Contact us, we will be happy to answer them.