What is an EMV standard card?

The Reserve Bank of India has given deadline (June 30) for Indian banks to implement the EMV standard. Migrating to the new standard involves issuing EMV cards (debit/credit), deployment of EMV compliant terminals (ATM centers) and also upgrade network and also host systems to process chip transactions.

Here are the benefits that EMV standard brings in for bank customers:

• EMV is a global standard for credit and debit payment cards based on smart card based technology which is significantly more secure than traditional magstripe cards. This technology has been tremendously successful in preventing fraud worldwide and makes it much harder for criminals to clone cards.

• The success of the migration exercise is exemplified by the case of Malaysia, which fully converted to EMV chip ATM cards by end-2005. Card fraud was reduced by 85 per cent from US$5.9 million in 2003 to US$0.3m in that year alone.

• EMV uses dynamic data which makes it an important aspect from a fraud-prevention standpoint. Each transaction carries a unique ‘stamp' which prevents the transaction data from being fraudulently reused, even if it is stolen from a merchant's or processor's database.

• This technology is based on strong cryptography and an elaborate key management that ensures transaction integrity. PIN verification can be added as an added security layer to increase the level of security and offer two-factor authentication by EMV cards. First factor is something you know, the PIN, and the second factor is something you have, the chip card.

• The EMV card can also be used to make the card-not-present (online/ phone) transactions safer. The EMV infrastructure can provide strong, dynamic cardholder authentication using one-time passwords (OTP). A hand-held device can be used to communicate with EMV card and generate OTP for online transactions.

(Source: Gemalto)