EMV standard (EuroCard-MasterCard and Visa) is an heritage from French Financial Institutions. This return on experience and investment was later adopted by major schemes in the 90s in order to eradicate Face to Face or Card Present fraud transactions.
USA is moving now to implement this technology. But still american professionals involved in Cards and Payments have doubts about EMV efficiency and pertinence. Let’s comeback on main reasons why EMV was adopted by european countries. Is EMV standard the right solution to reduce fraud and cardholder’s complaints ? To understand the interet of EMV for securing payments, back to the future as follows :
Why France, has been the first country worldwide ?
In 1984 France, has been the first country worldwide to launch a Chip and PIN (Personal Identification Number) technology in order to eradicate « face to face » or “Card Present” fraud transactions from ATMs as Merchant Point of Sales.
The main reason was a consequent and recurrent fraud coming from bankcards equipped with Magnetic Stripe on back and Embossed Characters in front to realize a purchase of goods or services from cardholders. These two prehistorically technologies (launched 30 years ago !) were mainly used to counterfeit cards easily. The back-office costs and …………………
EMV Deployment /Region
Secure Internet payments growth
When Internet appears in the mid-90s for B2C payments, Major schemes (Amex, MasterCard and Visa) started to implement a new standard « SET » (Secure Electronic Transactions) in order to develop a secured network using Internet area.
This standard was based on…………………… However, most of Financial Institutions did not follow Schemes to adapt their environments to answer to an opened networks like Internet is. With SET, some of the European banks………….
CVV-CVC implementation did not change the question
With card not present, Visa CVV (Card Verification Value) and MasterCard CVC (Card Verification Code) were added on back of bankcards in order to reduce potential fraud from MO/TO channels, including Internet. But this solution put starting in 2000, did not respond to major fraudulent sources of merchant attacks. In practice, merchants stored also………………..
EMV adapted for eCommerce and mCommerce ?
With the adoption of mobile payments, another challenge must be faced and probably EMV will play a major role in order to secure and authenticate the cardholder offering a guarantee of payment in benefit to merchants…………………………………………………………………….
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