What is EMV?

EMV stands for Europay, MasterCard and Visa.  It is the new global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions.  After so many large-scale data breaches and increasing rates of counterfeit card fraud, U.S. card issuers are transitioning to this new technology to protect consumers and reduce costs of fraud.

Technical Definition

It is a security framework that defines the payment interaction at the physical, electrical, data and application levels between chip cards and payment devices.  These interactions are often referred to as EMV Level 1 and 2 requirements.  EMVCo was created by the payment networks to be a neutral party in making this standard framework.

How Does it Work?

Smart cards are embedded with a chip that is encrypted with data.  EMV-enabled devices have the ability to read data stored on a chip within the card.  During the transaction authorization process, strong cryptographic functions are used to validate the authenticity of the card and cardholder.
Best of all, when a customer pays using an EMV-enabled device, the device is instantly identified as an authentic, approved payment instrument through a process called dynamic authentication.  When used with a PIN, the chip proves that the customer is paying with his or her own card.
By using chips as an active part of the payment transaction, EMV cards and devices help prevent credit card fraud from stolen account numbers and cloned payment cards.