EMV is a standard that Europay, Mastercard International, and Visa International created. The standard is now managed by EMVCo, a consortium with control split equally among Visa, Mastercard, JCB, American Express, China UnionPay, and Discover. This consortium promotes the use of smart cards. A smart card is a payment card with an embedded microprocessor, or chip. Such cards are commonly known as chip cards. Because the chip can hold much more information than a magnetic stripe, it supports multiple methods of authentication. This makes transaction processes more secure for both the merchant and the consumer, resulting in fewer fraudulent transactions due to compromised data.

Security features include:

• Card verification: This protects against counterfeit cards by verifying the card. The verification process cannot use previously captured data; each chip card transaction creates unique transaction data with two-factor authorization using the chip and the card verification value (CVV).
• Cardholder verification: This verifies that the customer is an authorized cardholder. The issuer prioritizes cardholder verification methods (CVMs) based on the associated risk of the transaction. EMV supports four CVMs:
  • Offline PIN (internal/external PIN pad required)
  • Online PIN (internal/external PIN pad required)
  • Signature
  • No CVM
• Transaction authorization:
  • Online: EMV transactions use the same process as magnetic stripe transactions by communicating with the network. You can view the online authorization or decline in e-Connections.
  • Offline: The chip on the card and terminal communicate. The offline transaction does not require communication with the network. The chip uses issuer-defined risk parameters to approve or decline the transaction. You can't view the offline authorization or decline in the system until after the settlement.

Point of Sale devices are EMV enabled when both their hardware and software can accept and process contact (inserted) or contactless (tap) chip card transactions.