Every year counterfeit fraud losses continue to decrease all over the world thanks to the security of EMV.
What’s behind the security of an EMV card?
Why did the developers of EMV specify a smart card chip inside of every card? For one reason - security.
A smart card chip is a small computer (or microprocessor) that has its own data storage, processing power, and application software. Unlike a magnetic stripe card, a chip is extremely difficult to crack.
A smart chip offers greater security because it contains a secure vault that holds unique keys specific to each card that protect your transactions.
A Unique Code for Each Transaction
EMV cards generate a unique code that is validated by your bank for each transaction, and the code cannot be re-used. A fraudster couldn’t make a transaction using a fake card with stolen data at an EMV terminal because it wouldn’t be able to generate the proper code.
EMV security is based on strong cryptography which is used to generate the unique transaction codes that allow the terminal to authenticate the card. This cryptography is built on private key infrastructure, meaning that only a chip card that is personalized with the cardholder’s private key during manufacturing can generate a valid transaction.
SDA vs. DDA
EMV cards can use either SDA or DDA, which is Static or Dynamic Data Authentication. DDA has become the industry standard because it is much more effective at reducing card fraud. Visa and MasterCard have mandated a migration to DDA on all EMV cards in Europe and Canada, and it is becoming standard in the U.S., too.
How effective is DDA at preventing cloning? Extremely. France's financial authority, the Banque de France, has proudly touted that no fraud cloning cases have been reported since France completed its DDA migration program in 2008.
Learn more about DDA
Contactless and Mobile EMV
Contactless cards and mobile payments are attractive for the convenience they offer accountholders. Fortunately, today’s contactless EMV cards, along with Mobile EMV payments, are fortified with the full protection that EMV affords: two-way authentication of the card and POS, cryptographic verification, and the dynamic code that protects each transaction.