4 simple steps to security
By now you've likely heard news about EMV cards, otherwise known as chip cards. Chip card technology may be new to you, but Europe adopted these chip-and-PIN and chip-and-signature cards more than a decade ago to fight fraudulent payments. Still, you might be asking yourself, how do EMV cards work? What does this technology have that's better at stopping fraud than traditional cards with magnetic stripes? Let's take a look at four simple steps that outline how chip-enabled cards operate and why they can protect your business.
1. How do EMV Cards Work?
To perform a transaction using an EMV card, your business needs a new card reader that allows the cardholder to simply dip his or her card into the machine. Once inserted, the customer leaves the card in the device for a few seconds until prompted to remove it. CreditCards.com noted the machines read EMV cards two different ways. First, the device simply reads the card and second it verifies the transaction itself. Customers may also simply tap their EMV cards to make a payment if shops have a near field communication scanner. You might already see some shoppers use these scanners with Apple Pay or other smartphone mobile wallet technology.
While the entire payment process takes a few seconds longer than the swipe of a magnetic striped card, it is much more secure since it not only corroborates the cardholder's identity with each transaction, but also ensures the payment card is authentic and not a copy.
2. Why are EMV Cards Safer than Regular Payment Cards?
Besides the steps each reader takes to verify and authenticate a card, EMV cards are also incredibly difficult to duplicate. Fraudsters can easily copy sensitive financial information off a magnetic stripe and transfer it to a blank stripe - a process known as card skimming. Unlike magnetic stripes, EMV chips create a unique code for every transaction, making a stolen credit card number inoperable for subsequent transactions.
When it comes to payment cards featuring magnetic stripes, a transaction only requires the card number and expiration date. One reason it takes longer to read an EMV card is that the chip and the reader send a myriad amount of encrypted information back and forth before completing a sale.
3. Will I Need to Enter my PIN or Sign to Make a Payment?
The answer to this question depends on what type of card you have, not on whether it has an EMV chip in it. If you have a debit card that's a chip-and-PIN type, you will need to enter your PIN number whenever you enter the card in the EMV slot. If, however, you have a credit card that already requires you to sign for each transaction, then you will insert your card in the reader and sign for your purchase.
4. Better Fraud Protection for You and Your Customers
EMV cards not only safeguard cardholders, but also businesses that accept this type of payment. In fact, retailers, restaurants and other businesses should add EMV-readers to their point of sale systems as soon as possible. If companies swipe a card with a magnetic stripe and the card turns out to be stolen or fraudulent, the businesses themselves are on the hook for that money. Getting both cardholders and businesses up and running with EMV cards means greater security for all.