EMV vs. Magnetic Stripe Transaction Flow

Swipe or insert—Mag vs. EMV—how the deals get done
This quick, simple list shows how the two types of transactions begin and complete the circuit of a consumer’s payment.

Magnetic Stripe

Card is simply a static storage device that is read by the terminal. The terminal performs card swipe, PIN encryption and signature capture (integrated environments) functions.

Terminal Magstripe Transaction Flow

1.    Card is swiped through Terminal

2.    Authorization Request from Terminal to Acquirer

3.    Authorization Request from Acquirer to Issuer

4.    Authorization Response from Issuer to Acquirer

5.    Authorization Response from Acquirer to Terminal

EMV Chip

The issuing bank defines the processing rules via parameters on the chip. The application on the chip processes information supplied by the terminal and determines how to apply the rules for processing. The terminal helps enforce the rules on the chip. If terminal is unable to provide the services requested by the chip, the issuer may set rules that will result in the chip declining the transaction.

Terminal EMV Transaction Flow

1.    Card is inserted into EMV Terminal

2.    First Half of EMV Transaction Protocol


a.  Application Selection

b.  Read Application Data

c.  Offline Data Authentication

d.  Processing Restrictions

e.  Cardholder Verification

f. Terminal Risk Management

g.  Terminal Action Analysis

h.  Card Action Analysis


3.    Online Authorization Request from Card to Terminal

4.    Authorization Request from Terminal to Vantiv

5.    Authorization Request from Vantiv to Issuer

6.    Authorization Response from Issuer to Vantiv

7.    Authorization Response from Vantiv to Terminal

8.    Completion and script processing. If Issuer approved but card denied transaction a reversal is produced

9.    Card is removed from EMV Terminal 

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