The Risks & Benefits of EMV Solutions

At the beginning of the 21st century, a transaction revolution took place, in which paper based transactions began to be replaced by electronic equivalents. Now, the chip and pin method has become a global phenomenon, with the old "signing" verification being rendered obsolete.

Whilst this evolution of how we pay for things has reduced transaction processing costs worldwide, as well as increasing bank profits, unfortunately electronic purchasing has also widened our vulnerability to potential fraud.

It is far easier to clone a credit card than it ever was to forge a paper note. Despite having a barrage of information security services and procedures to counter such crime, it is estimated that credit card fraud cost the UK approximately £440 million last year (2009). Although this number does represents a 28% decrease on the previous year.

EMV, which stands for Europay, Mastercard & Visa, is a joint project between these three companies to make credit card fraud more difficult to perform. Although the technology has many benefits which go far beyond fraud prevention.

The positive elements of EMV can be categorised into three particular aspects which demonstrate the benefits of adopting the system. These are:

The Interchange Rate
The Liability Shift to non-EMV party
Financial Incentives


Firstly, the interchange rates payable by the acquirer to the issuer is decreased by 10 basis points of the transaction value where the card is acquired at an EMV terminal. The second aspect of liability shift comes into play in the event of a disputed transaction. In such an instance, the cost of the transaction would be payable by the party who has not implemented EMV. Finally, every EMV region possesses a fund which exists to aid banks financially with the costs of migration to EMV.

Additional benefits of EMV technology is the ability to reconfigure the cards after they have been issued. Previously, in order to make any changes to the customer's offline limits, a new card had to be issued. Now however, a script is sent to the terminal which will update the card configuration without the need for a new card to be distributed.

Since the introduction of the EMV initiative in the early 21st century, there has been a swift implementation of ATM software which complies with new EMV technolgy. These EMV ATM solutions now represent the norm throughout the world.