Credit card payments are secured in a number of different ways. Some of the most basic security measures include AVS, or Address Verification System and CCV. However, neither method is fool proof. If a thief knows the address of the victim they’ve stolen the card from, they can bypass AVS. CCV is the three digit code on the back of the card, and is a system designed to ensure that the person entering the credit card number is in physical possession of it.
While CCV can be very effective for securing online transactions, if a card is stolen from the owner, the thief can then use it to make purchases online, since they have access to both the card number and the three digit code. This is why newer security measures are being developed to further secure credit card payments, with one of the newest being EMV.
EMV cards, also known as smart cards, are much more secure than traditional credit cards. They are designed with a microprocessor that is embedded within the surface, and it acts as a type of miniature computer which offers high security and additional capabilities not seen on traditional credit cards with magnetic strips. This microprocessor stores the credit card data while also carrying out cryptographic operations that protect the card from criminals.
Chip technology comes in two forms: a contact chip and a chip that is contactless. A contact chip is one that needs physical contact with a card reader in order for data to be transmitted through the terminal, while contactless chips need no physical contact with the card reader, and will instead use a radio frequency for communication.
Why Merchants and Customers Should Switch to EMV Cards
EMV cards have a number of advantages over traditional credit cards. Because the chips used in EMV cards can hold a great deal more information, this means that they support more verification systems. Additionally, EMV cards are accepted worldwide, whereas traditional credit cards are not. Visa and MasterCard have both announced plans to incorporate this technology in their newest credit cards, and will offer incentives to merchants that upgrade their credit card terminals to accept them.
The newest EMV systems will be capable of carrying out multiple tasks simultaneously, such as managing the traditional cards with magnetic strips as well as newer chip cards. They will also be compatible with systems that are able to process payments through smartphones. However, it will take as long as five years for these new EMV cards to phase out traditional credit cards.
Wise merchants will adopt EMV processing systems as soon as possible, as it will allow them to increase their profits by being able to accept multiple forms of payment. A number of large banks and other financial institutions have been issuing these new cards for their clients, especially those who are having problems using traditional credit cards overseas. As these cards are adapted by more cardholders worldwide, it will become crucial to cater to customers that use them.