One of the most popular subjects we get asked about is EMV. Common questions merchants reach out to our payment technology company / payment processing company with include:
What is EMV chip?
What does EMV stand for?
Will EMV eliminate payment fraud?
Read on to learn exactly what EMV chip is, what EMV stands for, and more as we debunk 11 EMV myths.
What is an EMV Chip & What Does EMV Stand for?
Open your wallet and pull out your credit and debit cards. Do you have a silver chip on any of your cards? That’s exactly what an EMV chip is. EMV stands for Europay, MasterCard, Visa. EMV is a more secure way of utilizing cards for consumers to pay for goods and for merchants to accept payments. Despite EMV being around for years now, confusion around it still remains.
11 EMV Myths Debunked
The United States Payment Forum, a cross-industry body that focuses on addressing issues across the merchant services industry debunked the 11 EMV myths, which we’ve summarized.
Myth 1: EMV will eliminate all payments fraud.
Fact 1: 3 Points
EMV chip technology was introduced specifically to eliminate the growing issue of counterfeit card-present fraud and has been extremely effective.
The technology combats counterfeit card-present fraud by creating a unique one-time code for each transaction.
This dynamic code decreases the value of card data and eliminates the ability for thieves to use a counterfeit card at a chip-enabled terminal.
Myth 2: Chip card transactions use encryption technology.
Fact 2: EMV Card Transaction Focus Points
EMV chip technology improves the security of a payment transaction by using cryptographic card authentication that helps protect against the acceptance of counterfeit cards.
EMV does not encrypt any card data (sensitive or otherwise) during the chip transaction process.
Myth 3: EMV was implemented in the U.S. to shift fraud liability from one party to another.
Fact 3: Highlights
EMV chip technology was introduced as a solution to eliminate in-store counterfeit fraud, after it had proven its effectiveness in global markets.
As a way to incentivize both merchants and issuers to make the transition to the more secure technology, the party with the less-secure technology is responsible for the cost of a fraudulent transaction.
Myth 4: EMV only prevents fraud with chip and PIN.
Fact 4: Myth Features
It is sometimes reported that only chip used with a PIN prevents fraud which is inaccurate.
The chip on its own is the primary mechanism for preventing card present counterfeit card fraud.
EMV chip technology provides dynamic data for every transaction to the card issuer to validate that the genuine card was presented to the merchant.
Myth 5: Payment fraud just shifted to card-not-present (CNP) and net fraud is going up.
Fact 5: Focal Points
Criminals are looking for new avenues – including buy online pick up in store (BOPIS) fraud, CNP e-commerce fraud and at the Automated Fuel Dispenser (AFD) where EMV chip upgrades have not yet occurred.
Merchants are staying vigilant and are taking a systematic, multi-layered approach using tools such as advanced authentication, fraud tools and tokenization together to create successful fraud reduction programs.
Myth 6: A thief can easily electronically pickpocket your contactless card/device.
Fact 6: 2 Points to Make Note of
While smart phone applications that enable the phone to read some of the data from a contactless enabled card or device do exist, they can only read the account number and expiration date.
Thieves would need to be physically close to the card to get this information.
Myth 7: If a thief does intercept your contactless information, they can create a counterfeit card and successfully use it to conduct in-store transactions.
Fact 7: Highlights
When you make a contactless transaction, the payment device – card, mobile device or wearable – provides the payment terminal with a dynamic, one-time use code necessary to successfully complete the transaction.
Even if a thief had your contactless card information, they would not be able to create a counterfeit card that could replicate the one-time code needed for a successful in-store transaction.
Myth 8: Even if a thief can’t counterfeit your contactless card, they can make purchases online or by phone.
Fact 8: Points to Note
For a purchase to be authenticated and authorized via phone or online, typically several pieces of information must be presented – including the three-digit code on the back of a card and the cardholder’s name and billing address.
Thieves typically don’t have the information needed to conduct payment transactions, either in person, on the phone, or online. (Source: MasterCard)
Myth 9: In addition to stealing your card data, thieves can also steal your identity.
Fact 9: Highlights
Contactless cards and devices do not transmit information about the cardholder such as name or address to mitigate the chance of identity theft.
Myth 10: Thieves can create usable counterfeit cards through shimming.
Fact 10: Highlights
Shimmed data, which is stolen through a hard-to-detect device attached to a terminal, cannot be used to create a usable magnetic stripe counterfeit card.
While shimmers that collect card data from an EMV chip card inserted in a terminal exist, the usefulness of the data collected is severely limited because EMV chips use dynamic data that is unique for every transaction.
Myth 11: Cardholders are responsible for purchases made by thieves if they steal your card information.
Fact 11: Straight and to the Point
Issuers have zero liability policies, so cardholders are not liable for fraudulent charges. For specific policy information, cardholders should contact their bank.
For more information on each, view the myth guide.
Have additional questions about EMV including how to get your business EMV compliant? Contact us.
One of our most popular service offerings that we help businesses with is accepting credit cards for their small, medium-sized, and large business. At this time, we mainly work with merchant in the United States. In addition to being a payment processor, we are a payment technology/fintech company. Popular locations we serve include: New York City, North Jersey, Washington, DC, Phoenix, Arizona, Los Angeles California, Dallas, Texas, and Baltimore, Maryland.