EMV stands for Europay, Mastercard and Visa. They are the ones that developed this new, higher level of standard for credit card transactions. Adoption in the U.S. has been slow, so the Obama administration is taking steps to expedite the EMV standard.
Basically, The EMV standard will require credit card companies to stop relying on the magnetic stripe cards that are common today and move toward cards with embedded chips that will offer more secure credit card transactions. The directive passed by the government gives an October 2015 deadline to adopt the EMV standard, but on October 17, 2014, President Obama signed an executive order to essentially light a fire under the rear-ends of U.S. merchants.
It seems as though the poking and prodding worked. Stores such as Home Depot, Target, Walgreens and Walmart agreed to adopt the EMV standard by January 2015.
How It Works And What It Does
The chip embedded on EMV cards creates a unique code for each transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... when the card is used, so stealing the card number is much more difficult for an attacker. The randomness of the generated code means the cards information is much harder to track and steal. The EMV technology is by no means “hack-proof,” but is much safer than the alternative magnetic-stripe.
Naturally, the EMV standard will also help against identity theft since it will be harder to hone in on consumer’s personal information.
The ETA (Electronic Transactions Association) said of The President’s actions, “EMV implementation is a vital step in addressing counterfeit card fraud, the single largest source of card fraud in the USA … The decision of the US government to support such cards will help drive further merchantA business that accepts credit cards for goods or services. upgrades.”
It’s definitely odd why many merchants have dragged their feet when it comes to adopting this new standard. Especially since if they don’t by October 2015, they could be on the hook for any fraudulent charges that go through their business. Look for more merchants to upgrade to the EMV standard along with NFC payment methods such as Google Wallet and Apple Pay.