Chip-and-PIN Cards – The Next Big Shift in Transaction Security

One of the biggest ongoing shifts in the credit card payment sphere is the gradual adoption of EMV “chip-and-pin” technology. Visa and Mastercard announced in mid-2013 that they would start pushing for broader adoption of EMV chip technologies in the United States, and all four major credit card processors (Visa, Mastercard, Discover, and Amex) intend to institute a liability shift for all POS devices not using EMV by October of 2015. This is a move that has broad implications for credit card processing and security in the U.S.

The major differences between most common credit card systems and EMV readers are straightforward: First, EMV readers are equipped to read the small, copper-colored chip embedded in every EMV card; and second, EMV credit card transactions require the customer to enter a PIN rather than a signature when checking out. Simple magnetic credit card readers are not EMV-compatible, but EMV-capable readers can work with either card type.

Why is this such a big shift? Well, as mentioned above, the adoption of EMV has broad security implications for the credit card industry. Most importantly, chip-and-pin technology will help prevent a great deal of face-to-face credit card fraud – and given that card fraud jumped more than 17% in the last year, it’s important that merchants do what they can to stop it.

However, it’s also important to remember that EMV is not a one-stop security solution. It’s true that it will help prevent fraud and secure transactions. Visa has so much faith in the technology that they offer a one-year waiver on annual PCI compliance for businesses that process 75% or more of their transactions using EMV. What it cannot do, though, is secure data that is already in your system or help security in card-not-present transactions.

Thus, chip-and-pin will serve merchants best if they use it as part of a deeper, multi-layered security solution. True security combines solutions from several different spheres. EMV can be used to secure physical transactions, while strong encryption and tokenization can be used to secure online transactions and data records. Using multiple layers of security provides more complete protection than any one system is able to.

If you want to learn more about how you can keep credit card transactions and data secure at every stage, contact TokenEx today. We’re an enterprise data security provider that specializes in credit card data security. Follow us on Facebook or Twitter for all of the latest news about our services and industry.

Follow TokenEx on LinkedInFacebook and Twitter to get the latest industry information on tokenizationHIPAA, and data security.

Topic(s): data security

Keep Up With Our PCI & Privacy Blog