EMV stands for Europay, MasterCard, and Visa and is a global standard for credit cards using computer chips to authenticate and secure transactions. Whether you know them as smart cards or chip cards, EMV cards store their data on integrated circuits and provide a one-time code at the point of sale that allows a payment to be made. No personal or card information is transferred.
For nearly 50 years, magnetic stripe cards – or swipe cards – have been the primary form of credit card technology.
Based on the magnetic recording of information on plastic tape which evolved from recording technology developed during World War II, magnetic stripe plastic cards hold information readable by point-of-sale card readers by a narrow magnetic stripe melted into the plastic card.
The static information held on a magnetic stripe card includes highly sensitive information about the cardholder’s account such as credit card number, full name, and expiration date.
Why the move to EMV cards from magnetic stripes?
Visa and MasterCard have issued a deadline to all card acceptors to replace magnetic stripe card readers with EMV chip card technology by 2020 or they will face increased liability in the event of fraud.
The move has been initiated because EMV eliminates fraud at the point of sale. The US alone sees $8 billion in credit card fraud annually from magnetic stripe cards. The migration to chip cards will have a huge effect on this rate as EMV authenticates a card to the POS terminal and vice versa.
EMV vs. Magnetic Stripe
EMV is far more secure EMV has proven to be one of the strongest technologies for fraud prevention. The chip authenticates the card directly to the POS terminal and the terminal to the card, encoded uniquely every time, often requiring a signature or PIN.
The dynamic authentication capabilities on the EMV chip including the encrypted PIN are very difficult to clone and nearly eliminate skimming scams.
Magnetic stripe cards, on the other hand, are highly susceptible to identity theft. They hold static information including the credit card number, cardholder’s full name, expiration date, and country code. Criminals using simple technology can skim magnetic cards and gain access to this information.
EMV already has broad consumer support
70% of consumers now have EMV chip cards.
EMV is the only form considered compliant for 2020
Visa and MasterCard are requiring EMV by 2020 to shift liability. Installing EMV is the only way to comply with this requirement.
EMV readers can be backwards compatible
EMV readers can accept magnetic swipe cards until EMV cards fully replace them.
EMV has consumer marketing opportunities
EMV cards can associate reward perks or promotions directly at POS. Magnetic stripe cards cannot.
You may also be interested in "Trend Watch: Instant EMV vs. Mobile Payments"
Plan your EMV migration in 3 steps
- Don’t wait to migrate.
As more banks issue chip cards to new and existing customers, businesses that have not already migrated to EMV cards may have to answer to their customers – especially when the market presents chip technology as the safer way to pay.
- Get a business playbook together.
As equipment upgrades have the potential to be both costly and time-consuming, its best to get started early. Figure out how much is going to cost, how long it’s going to take and plan accordingly.
- Communicate thoroughly.
Training and product awareness at both the business and the employee level is crucial to a successful implementation.
Finally, consider setting yourself up with an Instant EMV solution, which allows you to issue EMV cards right from your desk. Your activation rate is immediately 100% and your customer leaves satisfied with their card in hand.
Choose BLM Technologies as your Instant EMV partner.
Read more about our national reach as a powerhouse of Instant EMV card hardware, installation, and service, and how we cover all the bases with a Total Tech Solution to make your job easier.