EMV Chip

What Does EMV Chip Mean?

An EMV chip is an embedded microprocessor chip in payment cards such as credit and debit cards which stores and protects cardholder data. EMV chip technology was originally developed by Europay, Mastercard and Visa, with the EMV chip storing data on integrated circuits rather than magnetic stripes. The EMV standard is an advancement to combat fraud and to secure and protect sensitive payment data.


Techopedia Explains EMV Chip

The EMV standard is currently managed by a consortium called EMVCo. With the help of complex processing techniques and superior algorithms, EMV chips are bringing better security to payment card users. An EMV chip card ensures the payment data is more secure than on a magnetic-stripe-based card. Data from the magnetic stripe of a conventional payment card can be copied and authentication capabilities are less. The EMV chip provides dynamic authentication capabilities as it generates a unique authentication code for each transaction.

There are major benefits of moving to EMV-chip-based payment cards. It provides finer control of offline payment card transaction approvals, and it makes transactions safer for customers both online and offline. The major advantage, however, is the improved security features associated with the EMV standard compared to the magnetic-stripe-based card, which relies only on visual inspection of the card and holder’s signature. An EMV chip also helps in reducing the risk of identity theft with the help of a more thorough authentication process. Another benefit associated with an EMV chip is the larger capacity to hold and write information compared to the magnetic stripe. EMV cards also help in reducing and simplifying the data flow between the terminal and card processor or gateway with the help of complex EMV certification requirements.


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Margaret Rouse

Margaret is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical business audience. Over the past twenty years, her IT definitions have been published by Que in an encyclopedia of technology terms and cited in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine, and Discovery Magazine. She joined Techopedia in 2011. Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages.