What Is the Security Behind EMV Chip Payments?

emv migration

Increased security and reduction of in-person counterfeit card fraud are major drivers for the ongoing migration to EMV chip payments in the U.S. However, the advanced security processes going on behind the scenes of a chip transaction may be confusing for stakeholders new to the technology. The EMV Migration Forum simplifies one of the fundamental security features of chip transactions – the cryptogram – in a new video tutorial released today.

The video presentation, “Contact Chip Card Online Authentication,” is available for viewing at http://www.emv-connection.com/contact-chip-card-online-authentication.

The visual, non-technical presentation describes the process of online authentication that occurs in every chip transaction. As a part of this process, the chip and card issuer communicate with each other to create cryptograms, or dynamically generated codes that are unique to the specific card and transaction. These cryptograms are essential components of the chip transaction that validate that the chip and the issuer in the transaction are genuine, not counterfeit.

“The creation of dynamic cryptograms for every transaction with online authentication is an important feature of chip cards that provide enhanced levels of security,” said Randy Vanderhoof, director of the EMV Migration Forum. “Using this process means that even if fraudsters were somehow able to steal account data from chip transactions, they would not be able to use it to create a counterfeit card and have fraudulent transactions authorized in a chip or magnetic stripe environment. This presentation explains in easy-to-understand detail how this important security process occurs in a chip transaction.”

Use of chip cards has proven to be extremely effective at reducing in-person card fraud in countries that have deployed chip technology; for example, the UK and Canada saw reductions of 72 percent and 48 percent respectively. The U.S. is currently in the midst of migrating to chip technology, with 600 million cards expected to be in the market by the end of 2015. For more information on the U.S. migration to chip, visit http://www.emv-connection.com.

The video presentation, “Contact Chip Card Online Authentication,” was developed by the EMV Migration Forum’s Communication and Education Working Committee and led by Brady Cullimore, director of the U.S. EMV project management office at American Express. For more information on the EMV Migration Forum working committees, visit http://www.emv-connection.com/emv-migration-forum/working-committees/.

About U.S. EMV Migration
Commonly used globally in place of magnetic stripe, EMV chip technology helps to reduce card fraud in a face-to-face card-present environment; provides global interoperability; and enables safer transactions across contact and contactless channels. EMV implementation was initiated in the U.S. market in in 2011 and 2012 when American Express, Discover, MasterCard and Visa announced their roadmaps for supporting an EMV-based payments infrastructure. Acquirer processor readiness mandates to support EMV were established for 2013, with liability shifts for managing fraud risk in a face-to-face environment set for 2015. 

About the EMV Migration Forum
The EMV Migration Forum is a cross-industry body focused on supporting the EMV implementation steps required for global and regional payment networks, issuers, processors, merchants, and consumers to help ensure a successful introduction of more secure EMV chip technology in the United States. The focus of the Forum is to address topics that require some level of industry cooperation and/or coordination to migrate successfully to EMV technology in the United States. For more information on the EMV Migration Forum, please visit http://www.emv-connection.com/emv-migration-forum/

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