EMV is a de facto standard for debit and credit bank cards, jointly developed by Europay, MasterCard and Visa. EMV will mean that the current magnetic stripe banking cards will be replaced with smart cards in the coming years. This change is a major one, considering there exist about 1.5 billion international debit and credit cards, and the available points of usage are in the range of 20 million.
What does EMV mean in practice?
EMV brings the following new properties to a debit/credit transaction:
The card is significantly more secure when compared to traditional technology. The most visible change from the cardholder’s perspective is that he/she is verified by the PIN code of the card not only at the ATM but also at retailers end. This means that the traditional manual signing of the receipt or personal identification is no longer necessary. The cardholder can simply insert the card into the terminal, select the mode of payment and accept the payment. The new procedure also simplifies a cashier’s task.
EMV specifies both debit and credit applications on the smart card. Banks also have a need for this more multi-faceted card, made possible by the decision to implement EMV on smart cards. EMV has further advantages, having been built to enable the multi-functionality and multi-applications which it holds. Typically, these include a stored value or loyalty, as well as identification schemes.