Saturday, April 20, 2024

    Preventing Credit Card Fraud With EMV Technology

    Preventing Credit Card Fraud With EMV Technology is explained here on

    Since October 1, 2015, there have been a lot of changes in how credit cards are used to pay for purchases at retail stores in the United States. That is because a new EMV compliance technology has been introduced, called the EMV liability shift.

    Preventing Credit Card Fraud With EMV Technology

    What this means is that the rules of credit card usage have been changed in order to enhance card security and eliminate any risk of credit card counterfeit fraud in the US and abroad.

    Credit card fraud is a serious issue, not just in the United States, where most stores used magnetic stripe technology for processing credit card payments, but across throughout the world. The magnetic strip technology wasn’t all that great at checking frauds. Indeed, over 50% of credit card frauds worldwide happen in the US. Europe has much lower instances of counterfeit fraud and that’s largely due to the use EMV technology to process credit card payments there.

    EMV Technology – An Introduction

    EMV is an acronym for EuroPay, MasterCard, and Visa and consists of embedding a computer chip in the credit cards. Instead of making customers swipe the credit card to make a payment at a retailer, with EMV, they are required to insert the card in a device given to them so that the computer chip present in the card can be read. This generates a dynamic authentication number that changes for every transaction.

    EMV technology makes it very difficult to for anyone to counterfeit the credit card as adds an extra protective layer to the payment process.

    EMV is safe that for this reason the technology has now been introduced in stores across the United States.

    EMV Technology – How It Works

    emv technology
    CC BY by Aranami

    First, all stores are given new devices based on the EMV technology to process customers’ cards. All card issuers will be expected to issue cards that have EMV chips embedded in them. There are 3 ways using which you can make a payment with your card using the EMV technology.

    There is the “Chip & Pin” method, which is the same as transactions made using an ATM card. Here, the computer chip within the card and a PIN given to the customer are used. The card is entered into the device and is removed only after the transaction is done.

    Then you have “Chip & Signature” which uses the computer chip for the transaction. As a customer, you will need to sign a receipt for it, instead of using a PIN.

    The third method is the most unsafe method; it is the same as the credit card transactions used traditionally – swiping the card with a signature authentication.

    The EMV Liability Shift – How Does It Affect Store Owners?

    The EMV Liability Shift means any liability for counterfeit credit card transactions now belong the merchant and not to the issuer if the merchant has not introduced EMV compliant systems at his store.  So, if you do not have EMV compliant technologies in your store, you are basically liable for all the counterfeit card transactions done at your store. This means the responsibility for refunding the card holder’s money in case of a credit card fraud, is now on you, and not on the credit card company. This has serious implications for store owners and makes it so important to make your store EMV compliant.

     Final Point

    There is a difference in how the EMV liability shift works with Visa and MasterCard. MasterCard extends the shift to all products related to it, including ATM counterfeit cards. Visa, on the other hand, extends the EMV liability shift only to counterfeit cards, but not stolen or lost cards.



    Raghav Hegde
    Raghav Hegde
    I am a freelance ERP consultant based in Bangalore, India, and double up as a freelance writer in my spare time. My specialties include writing on technology, finance and politics. There is nothing I love more than reviewing the hottest tech products, and I hope to share my love of technology with you, the readers of Geekers Magazine, to inform, educate and entertain. I like constructive criticism, so if you guys have any advice or suggestions for me, I really would appreciate that. Ciao! Raghav Hegde, Bangalore

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