For years we’ve been accustomed to our credit cards’ traditional technology here in the US. But this technology isn’t as high-tech as it used to be. Enter EMV technology, which adds a new layer of safety on our daily credit card transactions.
The little magnetic stripe on the back of credit cards contains all the card holder’s sensitive information.
It was only a matter of time before bad people would figure out a way to obtain the information. It’s now easy for them to gain access to credit card users’ accounts and make fraudulent charges to them.
The reason for this is because the information on the credit card’s magnetic stripe can be easily copied and reused. Because the information is unchanging or “static,” a fraudster can use the same information over and over again until the account holder catches on and cancels the card.
In some cases it takes a while for them to notice. All the while, the fraudster is having a good ol’ time shopping on their dime.
So what’s the solution?
The US has joined every other major market in the world in using EMV technology, or smart card technology…
… because this technology is proven more secure, resulting in less credit card fraud.
It’s a constant struggle for credit card companies to protect consumers from security threats.
The problem is with traditional magstripe cards, there’s only so much they can do to protect consumers from those threats. With card copying readers available on the black market, it’s become very easy for criminals to gain access to private accounts.
There’s also the added threat of online hackers hacking into large retailers’ databases and stealing their customers’ credit card information.
This happened within the last few years with large retailers Target and Home Depot. Hackers were able to get into their online customer databases and steal credit card user’s information.
Actually, in 2014, there were 59.3 million database breaches! Most of them were small businesses. Of those millions of breaches only 43 of them were made public.
JPMorgan Chase, which happens to be the largest financial institution in the United States, also experienced a security breach in 2014. This breach alone affected over 70 million homes in the U.S.
These and other major security threats over the years have forced the hand of credit card companies. They have had to come up with a better way to combat security threats.
They believe they now have the answer with the switch to EMV technology.
EMV stands for EuroPay, Mastercard, and Visa: the three companies who came up with the standard for EMV technology.
The way it works is through a new type of credit card. Each credit card now comes with a tiny little computer chip in it which is very hard to counterfeit.
The microchips in the cards have small circuits built into them which store all of the user’s personal information. These cards keep users’ information much safer because the personal information is encrypted.
It’s encrypted, so a unique code is created for every transaction the customer makes.
The cool part about this is, even if a not so honest person were able to somehow copy information from the transaction, they can’t reuse it. The code is one-time only, so it is useless to would-be criminals.
This technology is not actually “new.” Every other major market in the world besides the United States has been using this technology for almost a decade.
You’ll see these “smart” credit cards more and more until it’s the complete norm. You may have heard of them or seen them already if you’ve traveled in Europe.
Europe has used them instead of the magnetic stripe cards for a quite a while now and probably will look at you funny if you hand them your magnetic stripe card to pay for goods.
It is much easier to purchase things if you do a lot of business travel in other countries since they are already equipped to accept smart cards.
Other names for these cards which use EMV technology?
“Chip and PIN” and also “chip and signature” cards.
The embedded microchip is activated for purchases when the user enters their personal PIN number.
A signature can also be used as a secondary means of verification, at least in the United States.
Some cards have wireless capabilities as well. At terminals equipped with payment systems like Apple Pay, all the customer needs to do is “tap” their EMV smart card on the terminal and it transmits data wirelessly.
Guess what… RedFynn’s terminals allow you to accept any form of payment!
This is the new trend and the direction our technology is headed.
Because of the October 1st, 2015 EMV Compliance deadline, all terminals now have an EMV smart card reader built into them. The user simply inserts their smart card into the slot and the reader communicates with the EMV chip to verify the authenticity of the card. The user then enters their PIN number or signs their name to verify the transaction.
EMV technology is much safer for both customers and any retailer or company which accepts credit card payments. It keeps the customer’s personal information much safer and much harder to copy and reuse.
The safer the customer’s information is, the less likely businesses will experience fraud, which means they won’t be stuck holding the bag for those fraudulent purchases.
As a business, if you’re not able to process this EMV technology, then you’re liable for the fraud — instead of the financial institutions — if someone uses a counterfeit EMV card in your store.
So be sure you’re up to date!
To learn more about EMV and what RedFynn can do for you and your business, check out these articles: