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How Does an EMV Transaction Work?

October 26, 2020

The latest introduction to credit card safety includes the EMV transaction or Europay, Mastercard, and Visa. EMV represents every chip card in existence today and offers more security than magnetic card transactions.


Chip card technology, as EMV is known, offers a more secure way to process credit card transactions. Most consumers today have converted to this technology, and your business should too.

Here’s how EMV transactions work.

More Security than Magnetic Strip Cards

Here’s the thing. Magnetic strip cards put you at high risk of credit card theft. The data on the card, while ‘hidden’ by the magnetic strip, can be easily replicated. Thieves use skimmers and other ‘not so high tech’ ways to get the information.

EMV cards prevent this from happening. Rather than storing the information on the magnetic strip, they store the information in the chip, which automatically generates a unique code when used. The unique code is only good for that transaction. If a thief were to get his/her hands on the code, it wouldn’t work on any other transactions.

This means thieves can’t create a duplicate card based on the information they steal from an EMV card.

How Payments are Processed

At the checkout, rather than sliding a card through the reader, customers insert the card into the chip reader. Together, the card and the reader communicate to move the process forward.

Customers then either sign for the purchase (chip and sign) or enter their PIN (chip and PIN). It’s not until the transaction is authorized by the customer with either a signature or PIN that the authentication and communication with the acquiring and issuing bank begins.

Do EMV Transactions Completely Prevent Fraud?

Unfortunately, there is no fool-proof way to prevent fraud. While EMV technology has greatly reduced it, there is still the risk, which is why PCI compliance is crucial for all merchants.

The combination of chip technology and PCI compliance can reduce the risk of fraud, though. The lower your fraud incidents, the more your customers will trust you and keep coming back.

Can EMV Transactions Prevent Card not Present Fraud?

Unfortunately, card not present fraud is still a very high risk. EMV cards can’t prevent thieves from grabbing a customer’s information when making a transaction online or over the phone. The risk of card, not present transactions remains high, which is why using a proper payment gateway with PCI compliance is crucial.

Are you Using EMV Technology Yet?

EMV technology is important. Not all businesses have jumped on board, but it’s time. If you want to lower your risk of a data breach and give your customers peace of mind, accepting EMV cards is the key.

While the transition may cost a little money as you update your equipment and learn the new way of doing business, your bottom line will increase with the trust your customers will have in your business. Magnetic stripe credit card transactions are too risky today, making EMV transactions a must-have for every business.

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