What are EMV Payments?

You probably haven’t given much thought to the small computer chip that may be implanted in your credit or debit card.

This chip and the terminal and hardware that can read it are part of the new EMV standard that allows you to use the card to pay for purchases in more secure and efficient ways than the magstripe standard before it.

VIDEO TRANSCRIPT
What Are EMV payments?
Does your debit or credit card have a small computer chip implanted in it? If so, your card is sporting an EMV chip. Named after the creator’s – Europay, MasterCard, and Visa and is a security standard separate from the mag stripe standard before it.
That was introduced to increase security when processing debit and credit card transactions and is exclusive to the payments industry. EMV transactions have several measures in place to better protect the cardholder, the merchants, the issuing banks, and the acquirers or processors involved in card transactions.
EMV transactions can be processed in a couple of different ways but always with the card present. EMV transactions are completed using the computer chip implanted on the EMV enabled credit card or debit card. They are commonly referred to as chip and dip, or Chip and PIN because they generally require the card to be inserted into a terminal or reader and typically require the pin to be entered by the cardholder.
Contactless EMV transactions require NFC, or near field communication technology, in both the EMV enabled card or device and the terminal, in order for communication to occur and a transaction to be processed. Check out our FYI on NFC for more information on contactless transactions.
When the standard was first introduced, EMV transactions had a significant impact on helping reduce card-present fraud due to the unique transaction ID that is created every time a payment is made. These transaction IDs cannot be replicated which makes it more difficult for fraudsters to replicate the EMV enabled cards compared to traditional magnetic strip cards.
Most newer payment terminals can accept EMV payments, and since 2015, merchants can now be responsible for some types of fraud if they do not process the chip card with an EMV enabled processing device. As the payment industry continues to heighten card security, it’s important that your business is aware of the changing standards and technology available.
Check out our YouTube channel and be sure to subscribe for more helpful content about payments, credit cards, and how it all affects your business. I’m Brittany from the Helcim team, thanks for watching.

EMV was developed and introduced by Europay, Mastercard, and Visa to enhance the security of credit and debit card payments. The security standard that is used for EMV payments is separate from the security standard used for magstripe cards and is exclusive to the payments industry.

The security standards that are included with the EMV chip help to protect everyone who is involved in the transaction, including the cardholders, merchants, issuers, and processors. When EMV cards were first introduced, they had a significant impact on payments fraud because the unique transaction ID’s can’t be replicated, making it more difficult for fraudsters to replicate the EMV enabled cards compared to traditional magstripe cards.

You are only able to complete EMV transactions for in-person transactions where the cardholder physically has an EMV enabled payment card with them, and when your terminal is enabled to accept EMV payments.

Transactions with EMV cards are commonly referred to as “Chip and Dip” or “Chip and Pin” because the cardholder is required to insert their card into the terminal and enter their pin to successfully process a transaction.

After the introduction of EMV enabled cards, there was a liability shift to the merchants making them responsible for fraud if they do not process a chip card with an EMV enabled terminal. This provided an incentive to merchants to upgrade to EMV enabled terminals, which most merchants have now done. This is one example of why it is important to keep up with the changing standards and technology available to those involved in the payment processing industry.

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