EMV vs Magnetic Stripe Systems

Fictitious bank credit card front with EMV and back with magnetic stripe

We all know that the chip, or EMV, POS is becoming the new standard for card-reading technology. But what is the difference between the original magnetic stripe and the new EMV? And which one is better?

Magnetic Stripe

What is a magnetic stripe card and what does it do? Well, your credit card is a storage device. It has all your important information, like your account number, your full name, the expiration and security codes to your card, even your Pin. This data, when stored on a magnetic stripe, is not protected at all.

These magnetic stripe cards base their system on trust. The merchant trusts that your card is valid and that you will make payments on that card, while you trust that the merchant won’t steal your information and use the card themselves.

But over the years, this trust wore down because security methods that supposedly protect your data have not kept up with the changes of technology. That makes them vulnerable to hackers. And because so many people have had credit card theft, it increases the risk for more fraud in the future.

The main source of this problem is inadequate credit card security. In 2012, the USA lost $5.3 billion in fraud compared to $6 billion for the rest of the world combined. It is the only country that has consistent fraud growth every single year.

To prevent more fraud and to rebuild your trust in the credit card companies, the EMV card was made and is being implemented all over the world.

EMV

EMV stands for EuropayMastercard, and Visa. Unlike the magnetic stripe, it has a computer chip which is much like an application to store your data. That computer chip is encrypted and it forces the systems it communicates with to follow specific instructions set up by your bank or credit card provider that check for your identity.

Because the EMV has to follow that list of instructions, your card and the terminal it is inserted into have to “talk” to one another and agree on which application should be run. Your information is encrypted by cryptographic keys and have a unique dynamic data authentication key, like a fingerprint. That is why it is so hard to duplicate a card with the EMV technology.

Since the instituting of EMV cards, fraud has been reduced in all areas of credit card use in the 28 countries which are part of the European Union. But fraud still continued to grow in the US, mostly because a majority of merchants won’t switch to the EMV cards.

Conclusion

If merchants were to switch to the EMV cards all across the US, credit card fraud would begin to go down. Identities would be protected, money saved and trust rebuilt. While EMV cards can’t prevent fraud 100 percent, it is far greater than anything the magnetic stripe cards can do. If you want to keep your customers safe and save your company time and money, contact us today and we can get you started!

3 Reasons Why Your POS Needs to Handle EMV Chip Card Acceptance

Close up EMV chip credit card

Over the last few years, many credit and debit card issuers have added the EMV chip to their cards. These are the little golden spots on cards that look somewhat like mini circuit boards. Inside them, microprocessors are embedded that encrypt data and make it more secure during transactions. There are many upsides to enabling your point-of-sale (POS) equipment for reading these chips. Here are some of the main benefits:

Transactions Gain a New Layer of Protection

Use of the EMV chip cards thwarts the use of skimmers, which steal information from swiped credit cards. They also prevent other forms of “sniffing” credit card numbers and transaction information done with other methods. Many customers are wary of such risks thanks to extensive media coverage about such fraud. These people will be glad to be able to use their chip cards, and some may even shy away from doing business with you if you don’t have it.

You’ll Lower Your Legal Liability

If someone gets their data stolen and points at your company, you’ll want to be able to show that you took all reasonable steps to protect their information. This includes using an EMV-capable card reader.

Your Company Will Be Seen as More Up to Date

EMV chip card acceptance has now been around long enough that people are seeing it as the standard. If your store or other outlets still force everyone to swipe their cards, it’ll be seen as a bit behind the times. In some areas, customers may even comment to this effect. Make sure you give the impression of being fully ready for modern business by adding this basic upgrade to your POS systems.

To learn more about upgrading your system to read EMV chips, just contact us. We’ll be glad to explain the technology and give more details about what makes updating worthwhile.