EMVchips

EMV chips are embedded microprocessor components in payment cards that enable secure, interoperable card-present transactions. The term EMV refers to standards originally developed by Europay, MasterCard, and Visa, and today managed by the EMVCo consortium, which coordinates updates with major card networks and payment providers. EMV cards store data on a chip and can perform cryptographic operations that static magnetic stripe cards cannot, improving security against counterfeit fraud.

In a typical EMV transaction, the card is inserted into a reader (contact) or tapped for a contactless payment. The terminal reads application data from the chip, and the chip generates cryptographic data to authenticate the card and the transaction. The process may include offline data authentication, such as Static Data Authentication (SDA), Dynamic Data Authentication (DDA), or Combined Data Authentication (CDA). Cardholder verification methods (CVM) may involve a personal identification number (PIN), a signature, or, in some cases, no CVM for low-value offline transactions.

Authorization can occur offline if allowed by the card and terminal risk parameters, or online by transmitting data to the issuer for approval. The issuer responds with an authorization decision, and the terminal confirms the outcome using an application cryptogram. EMV aims to reduce fraud by ensuring transaction-specific data and dynamic cryptography are used rather than static card data.

EMV cards are widely adopted worldwide and supported by banks and merchants for card-present payments. The EMV standard also covers contactless transactions via near-field communication (NFC) and supports evolving approaches such as tokenization and mobile wallet payments. While EMV reduces certain types of fraud, it does not eliminate all risks, particularly in card-not-present scenarios.