What is EMV?

EMV is a technical standard for smart payment cards and for payment terminals and automated teller machines which can accept them. EMV cards are smart cards (also called chip cards or IC cards) which store their data on integrated circuits rather than magnetic stripes, although many EMV cards also have stripes for backward compatibility. They can be contact cards which must be physically inserted (or “dipped”) into a reader, or contactless cards which can be read over a short distance using radio-frequency identification technology. Payment cards which comply with the EMV standard are often called chip-and-PIN or chip-and-signature cards, depending on the exact authentication methods required to use them.

EMV stands for Europay, MasterCard, and Visa, the three companies which originally created the standard. The standard is now managed by EMVCo, a consortium with control split equally among Visa, Mastercard, JCB, American Express, China UnionPay, and Discover.[1]

There are standards based on ISO/IEC 7816 for contact cards, and standards based on ISO/IEC 14443 for contactless cards (PayPass, PayWave, ExpressPay).
The most widely known chip card implementations of EMV standard are:

  • VIS – Visa 
  • M/Chip – MasterCard 
  • AEIPS – American Express 
  • CUP – China Union Pay 
  • J Smart – JCB 
  • D-PAS – Discover/Diners Club International.

Visa and MasterCard have also developed standards for using EMV cards in devices to support card not present transactions over the telephone and Internet. MasterCard has the Chip Authentication Program(CAP) for secure e-commerce. Its implementation is known as EMV-CAP and supports a number of modes. Visa has the Dynamic Passcode Authentication (DPA) scheme, which is their implementation of CAP using different default values.

Since the term EMV is not well known outside the payment industry, I thought we would review some of the questions you may have about EMV and how it will impact consumers and merchants across the United States.

The acronym itself stands for Europay MasterCard, Visa – the big three payment companies that have successfully introduced chip-enabled credit and debit cards in other areas of the world. The EMV standard will be operational in the United States by October 2015. 

It will prevent credit card fraud by making it impossible to counterfeit credit or debit cards along with the consumer’s private account data. The card contains a tiny microprocessor chip that can be programmed only by authorized companies. This new technology will eliminate credit card cloning – where a thief copies a credit card’s magnetic stripe information – and then uses the cloned card for unauthorized purchases. 

You will receive a chip-enabled card from your bank or organization when it is up for renewal. Even with credit card transactions, you may be required to set a PIN (personal identification number) that you use when you swipe your card. The swipe terminal reads the chip information and approves the transaction based on embedded security algorithms and your keyed-in PIN. In other instances, your signature may be used rather than a PIN. Using chip-and-PIN or chip-and-signature verification is more secure for transferring your payment data and getting authorization for your purchase.

EMV does a much better job of protecting your business and your customers from fraudulent transactions. To prepare for the switch to EMV, your terminals will be replaced with chip-enabled machines. Accepting chip cards will expand your business and lower your current expenses for processing credit cards. Since chip cards are used in virtually all other countries except the USA, you can now swipe chip cards from foreign visitors rather than hand-keying the transactions, lowering your expenses. Also, to maintain PCI compliance for customer data, EMV conversion is mandatory.


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