June 24, 2005

I recently wrote an article on the impact on metallic stripe cards that EMV cards would have when they are eventually brought into circulation all over the world, but you may have been thinking what is EMV? And how did they come about?

EMV stands for Europay/MasterCard/Visa, which is a standard that the three card associations came up with, in the mid 1990’s (1996).

The three associations came together a standard for a chip that was imbedded in the card, which would be able to hold more information on the customer, than the old metallic stripe card, these cards are more commonly known as smart cards, but up to now, because that the situation around the world right now where not everyone has the set up to deal with the new smart card infrastructure, though the system and the payment technology is ready, not all countries are ready to change over, though MasterCard and Visa may force the issue for those who are not so quick in the up take of the new system.

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This has led to the constant upgrade of technology by the independent organisation EMVCo, which was set up by the three associations in 1999, as they sought to fight the rising levels of card fraud, that was being seen at point of sale’s (POS) and ATM’S and they seen the smart cards as the forward in he battle to reduce the amount of fraud, that was being seen on the metallic stripe cards. They were not only seen as more secure than their predecessors, they would also hold a lot more information as well.

Results in the initial places who have introduced the EMV such as France, Visa have seen a reduction in card fraud and counterfeiting of 70% or over, this made countries like Britain to follow suit, as the work of the crooks there was also getting out of hand, though the system is not fully in operation in all retail outlets, it should be in the coming months.

The big stumbling block seems to be America, as the thought of using the EMV, has received a bit of a cold shoulder, as people don’t like the thought of using a smart card, when they are at an ATM or POS. Why this is I don’t know, maybe the thought of having more information on a card, just doesn’t appeal to them, as the smart card chip can take 13 times more info than the old metallic stripe cards.

Tough a warning to the USA, may be that before the introduction of the EMV cards, the British crook was becoming wiser by the day with regards making the most of the faults of the metallic stripe cards and there has seen a significant movement in card fraud across the pond.