NFC and EMV both refer to relatively new terms in payments technology that, together, have changed the landscape of accepting credit and debit cards for merchants and consumers alike. But what are they and what is the difference between them?
What is EMV?
EMV (which stands for EuroPay, Mastercard, and Visa) refers to a security standard which is exclusive to the payments industry. The EMV infrastructure is separate from the previous magstripe standard and its related infrastructure.
What is NFC?
NFC (which stands for "Near Field Communication") refers to the Radio Frequency Identification (RFID) technology (not exclusive to the payments industry) that allows two devices to communicate with each other simply by being in close proximity to one another. All NFC transactions are actually EMV transactions powered by RFID technology.
So What's The Difference?
These technologies are essentially the same: they allow for payments to take place, however the way they work is different. Standard EMV uses the chip embedded in the credit card to communicate with the card terminal, whereas NFC uses radio waves.
Are EMV/NFC Transactions Secure?
EMV was introduced to add additional security when processing payments to protect both the merchants and the cardholders and limit their exposure to fraud. When EMV was introduced around the world, it had a significant impact on card-present fraud. Each time you process an EMV transaction, the payment creates a unique transaction ID that cannot be replicated, and the cards themselves are also more difficult for fraudsters to replicate compared to magnetic stripe cards.
If a customer makes a purchase using NFC technology, then both Visa and Mastercard require the customer to hold their card (or device) close to the card reader for the transaction to be processed. Each NFC transaction also includes a unique security code to help protect against fraud. Unlike chip & pin or EMV transactions, many NFC transactions have a limit of about $100 in case the card is stolen, and if the transaction amount is above that, then customers will need to insert their card into the terminal and enter their pin for the transaction to go through.
NFC is a further development of EMV technology for use in payments. If a credit or debit card or NFC-enabled device is equipped with NFC, then cardholders are able to pay for a purchase by simply holding their card close to the terminal. However, EMV is still powering NFC payments, and the "old-fashioned" chip & pin is often still required.