How Do EMV Chip Cards Work?



EMV stands for Europay, Mastercard, and Visa, which is a global standard for credit and debit cards equipped with computer chips and the required technology that authenticates the chip card transactions. Earlier to EMV technology, magnetic strip cards were used which were more prone to breach of data and online frauds, in the wake of this it was made mandatory in almost all the nations to use EMV technology in the credit and debit cards. The way in which these EMV chip cards work make them more secure and safe.

Working Principle Of EMV Chip Cards

In order to understand the basis of working of EMV chip cards, it is very important to understand why the earlier technology was dumped, though it was much faster than this technology. The magnetic strip cards that were used earlier work on the principle of stored unchangeable user data in it and breach of this data was very easy in order to clone the card and do counterfeit card fraud. The working basis of EMV cards is interesting to be noted and will justify the basis of its implementation.


Dipping Of Card Data

EMV chip cards when inserted into the terminal slot they get dipped. Dipping is basically a technical term used for the activation of the computer chip on coming in contact with the terminal slot. This is totally different from what happens in the magnetic strip cards which are simply stored information that is shared on swiping it. Due to this reason the EMV chip cards work slower than the magnetic strip cards which instantly react once they get swiped.

Different Transaction Code Generation

EMV chips are computer chips, once they are dipped in the terminal slot a message is sent to the financial institution in verification of the card and the institution generates a unique transaction code which is obviously different for each transaction. Earlier when magnetic strip cards were used they on swiping share the information with the machine which is same and unchangeable and in case this information has been breached the card can be easily breached and the user bears the counterfeit fraud.

In case of the EMV chips if someone tries to copy the transaction data shared by the card while you are using it and if by chance he succeeds to copy the data in order to clone the card, this card will be of no use as there is different transaction code for each transaction and this cloned card will have the data of earlier transaction stored in it. Thus the probability of counterfeit card fraud is diminished. In EMV chips there is no sharing of information, rather there is two-way communication where the card number, CVV etc. are not shared rather a unique transaction code is communicated with the financial institution.

Near Field Communication

Dipping is not the only way in which the EMV chip cards work or can be used, a latest technological development enables the cards to be used without any contact with the machine and this technology is generally termed as wave technology. Customer needs to flash the EMV chip card before the scanning machine to make the transaction. The information from the card is shared for transaction code generation without any physical contact with the machine. This shortens the processing time of EMV chip cards as compared to earlier where they are inserted into the terminal slot.

This facility eliminates the only possible drawback of the EMV chip cards over the magnetic strip cards increasing its universal acceptance. Though facility can be availed at the purchase counters where the required technology of near field communication is available if in case the facility is not available then the cards can also be dipped to make the desired purchase. This means that the new technology does not limit the use of the card at certain stores only rather it can be used both the ways.

Full Time User Access

The user has the full-time access of the EMV chip card even while the transaction is taking place as card is dipped into the terminal slot and the transaction code is generated by the financial institution in a while and even in case the card is waved using the near field communication technology the card is in access of the user. In case of the magnetic strip cards, they are flushed into the machines and the skimmers are attached with the machines in order to copy the information from the magnetic strip which later can be used for counterfeit card fraud.

In order to complete the transaction, the user needs to enter the pin provided by the financial institution or there may be an option of using the signature. During all the time the card is in access of the user and no skimming of EMV chip cards can be done even if the person uses some skimmers attached to the machine while transacting as this technology is not easy to be skimmed due the fact that there is unique transaction code each time and a lot of hardship and time is required to skim the card and no one spares so much time for payment at the purchase counter.

The Bottom Line

EMV chip cards work on the basis of making the transactions fraud-free and safeguard its users and service providers from any financial loss. Globally this technology is made mandatory to make it safer and faster. EMV chips exhibit a number of features including two-way communication, contact-free wave technology using near field communication, full-time access to the user, durability and damage protection and much more making it more safer. Use of technology in order to safeguard your money is always a good option even if it costs your initial investment in order to bring the new technology.


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