The future of payment is now.
With the growing deployment of EMV smart card solutions, we're finally moving away from traditional — and highly vulnerable — cards and toward a solution that makes it very challenging for credit card fraud to be carried out. This is a vital step forward in the realm of payments, and one that couldn't come sooner, given the frequency of credit card-based attacks, and the growing sophistication of cybercriminals who attempt to carry out these intrusions.
As a technology, EMV functions to bolster the security of the payment transaction through the presence of an in-card chip that helps with authentication and verification.
In terms of what EMV does to provide an unprecedented degree of security during the transaction, there are three central elements, which Entrust Datacard VP of Financial Marketing Ray Wizbowski highlighted in a blog post:
- Card authentication: As a microprocessor, the EMV chip is able to make processing decisions that are unique to each transaction. There are a few ways this can happen: online (unique, transaction-based data is sent to issuer for authentication), offline (chip-stored logic is leveraged), transaction amount authorization (purchase amount is not at odds with cardholder's specified limits) and cardholder verification.
- Cardholder verification: Criminals using stolen credit cards is a huge problem, but that's something that EMV, coupled with a unique user PIN, can help to eliminate. When an individual harnesses the chip and PIN method of payment, he or she not only benefits from the security of the embedded EMV chip, but also from an additional layer of security in the form of a unique pin, which an imposter would be highly unlikely to know.
- Transaction verification: When you carry out a purchase with a credit card, that's a transaction that must be approved or declined. To card thieves who want to ensure that fraudulent transactions are verified as real ones, traditional cards have been helpful, since they've provided these criminals with a repository of magnetic stripe data. In the past, criminals have been able to get this data because it's stored on merchant POS devices and networks. But as Wizbowski explained, that's not the case with EMV transactions."EMV chip card transactions carry a unique cryptogram for each transaction making any stored information virtually useless to anyone who would gain access to the transaction data," Wizbowski stated. "Additionally, encoding chip data onto another card is very complex and requires very specialized equipment, making attempts to produce counterfeit cards impractical."
What You Need To Know About EMV
When it comes to payments, EMV represents the level of protection we need. Now that we've covered the basics of how EMV functions technically to provide security, here are four other important things to know about EMV solutions:
- The liability shift date is looming: Oct. 1 marks the beginning of a payment industry liability shift with regard to EMV implementation. What this means is that, effective on that day, the big credit card brands will place the financial burden of dealing with transactional fraud onto businesses that don't support EMV. While this does not represent an explicit mandate for all stores to adopt EMV support, it does create a significant amount of accountability for establishments that don't choose to go that route. Therefore, the liability shift is being viewed as a key step in the migration to EMV. This is a much-needed step, since as TechTarget pointed out, EMV adoption rates among businesses in the U.S. have been slow compared with other nations.
- All industries are having to strategize about EMV: Come Oct. 1, businesses that aren't prepared for EMV will have their hands full when fraudulent transactions occur. The reality of this new responsibility is leading enterprises across industrial sectors to strategize about rolling out an EMV migration. One such organizational sector dealing with the upcoming changes is the hotel industry.Among hotel chains, as a TravelMole blog post pointed out, leaders are increasingly deciding that instead of having individual hotels deal with bolstering PoS systems to accommodate EMV, the task of doing that will take place via adherence to nationwide brand standards. One of hotel chains using this tactic is Red Roof Inn, whose chief information officer, Jeff Linden, said that a set of "all new EMV-capable credit card readers" will be present across the company's hotels by Oct. 1.
- It's not going to be as challenging for small businesses to migrate as they think: When you start talking about an entire systems overhaul, this is the kind of topic that gets small business owners anxious. But as Small Business Computing pointed out, small business adoption of EMV doesn't have to be that difficult. And for businesses whose PoS tools are only a few years old, the chances are good that this equipment will already have terminals with the capacity to read EMV chips.
- EMV will boost customer satisfaction: These days, patrons often view store payment transactions as moments where their data may become vulnerable. Headlines about credit card attacks only validate these concerns. But the transition to EMV — and the notable security benefits that accompany it — will provide customers with the satisfaction of knowing their payment data is safe.
It's time to adopt EMV solutions, but fortunately, the migration doesn't have to be one filled with complexity. With Entrust Datacard's EMV solutions, we provide our users with the tools and dedicated expertise to make the deployment of EMV seamless and successful.