Visa, Discover, MasterCard and American Express are forcing the U.S. market to switch from magnetic stripe cards to new EMV smart chip cards. Although magstripe cards have been very common in America for decades, EMV technology has the ability to revolutionize the U.S. payments system by providing some new benefits to processors, customers and merchants.
EMV Allows More Secure Card-Present Transactions
EMV smart cards offer better transaction security to all users involved in the payment process. Currently used magstripe cards store all of their information in a single magnetic stripe. Although it allows a simple swipe to complete a transaction, it also means that the card’s information can be leaked by skimmers, and then used to create fake cards.
EMV cards store their information in a smart chip, and they are encrypted to protect data. It is difficult to leak data from that chip, and as it requires a technology to create another copy of microprocessor chip, it is very difficult to create a copy of that card. Moreover its data has an encryption protection.
EMV cards have many cardholder verification methods, where both consumers and businesses are protected from fraudulent spending and transactions.
EMV Supports Contact, Contactless, And Mobile Transaction Types
EMV technology supports more than chip-and-pin (Contact cards) transactions. It also enables contactless transactions, where cardholders have to tap cards against a terminal. Whereas contact payments require the card to be inserted into the terminal during the transaction, contactless payments are just as fast, or even slightly faster than traditional swipe payments done with magstripe cards.
EMV technology also supports secure and fast mobile wallet payments. In this system customers have to wave their smartphones over a terminal rather than tapping a card. Because mobile wallets are one of the important trends in the payment industry, EMV support for mobile transactions allows a merchant to spend for a single system to open multiple options for the customers.
EMV Is A Global Standard
With EMV entering the US market, it is becoming a global standard for card and mobile payments. This is good news for customers and domestic merchants.
American consumers will be able to use their own smart cards while traveling as magstripe cards currently have fairly high rejection rates because EMV is more common around the rest of the world.
Foreign consumers will also be able to pay with their own smart cards while traveling. Merchants in tourist-drawing U.S. cities will find EMV a lucrative prospect. Allowing tourists to spend money from their own smart cards or mobile wallets will attract more customers, making the checkout process faster and encourages extra spending.
EMV Payment Brands Offer PCI Relief For Compliant Merchants
For many merchants, PCI compliance is another problem to address on a daily basis. In order to encourage merchants to make the transition through EMV technology, payment brands are pushing for PCI-specific relief. The hope is that this move will remove upgrade costs incurred by the merchant, thus allowing them to make the transition without paying more fees.
EMV Systems Can Operate In Offline Mode
As EMV cards contain microprocessors that interacts directly with terminals, they can perform offline transaction verification and offline cardholder verification. The Offline Payment feature is not supported by magstripe cards, but with EMV chip its terminals can be configured to accept offline PIN codes. EMV cards can use verification data from their own microprocessor smart chips to verify PIN codes and create cryptograms, improving security without requiring an online connection to bank’s system.
Contact Omni Integration to receive custom EMV Certification service plans for your payment solutions.