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EMV

Reviewed by Sujaini | Updated on Sep 30, 2020

Catalogue

What is EMV?

EMV stands for Europay, MasterCard, and Visa. It is a standard for integrated circuit cards, point-of-sale (POS) terminals, and automated teller machines (ATMs) within the credit card industry.

EMV started as a jointly developed global standard that facilitates interoperability between the computer chip cards and the terminals used by the largest financial services companies. A consortium of financial firms now operates the norm and is known as EMV Co.

Understanding EMV

POS terminals that meet EMV standards typically require the cardholder to use a personal identification number or PIN rather than only providing a signature, which adds an additional layer of security. EMV cards also contain an integrated circuit chip, which encodes every transaction differently. If a criminal intercepts data from a chip card's transaction, the data cannot be reused to make another purchase.

The EMV standard encompasses the physical aspects of cards and devices, as well as the technological and data processing capabilities. This applies to cards requiring swiping (called contact cards), and non-contact cards (contactless cards), as well as new standards for e-commerce and online transactions being developed.

Credit and debit cards traditionally used a magnetic stripe to handle cardholder data. The cardholder would then sign an acknowledgement upon purchase. As a signature can be faked, this system did not provide a high level of security, and the magnetic stripe has proved relatively easy to hack, revealing the private information of the cardholder to criminals.

Where Was EMV Standard First Used?

The EMV standard was first adopted in Europe in the 1990s due to the prohibitively expensive telephone line card authorisation for European card issuers. International call rates caused card authentication costs to be up to 80 to 90 per cent higher in Europe than in the U.S. Card issuers did not move to the EMV standard until much later, with issuers setting an initial October 2015 deadline for merchants to adapt to the new technology.

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