In the past few years, the idea of proliferating use of both EMV and mobile payments has started to pick up some serious steam among both consumers and merchants. However, there may be some confusion as to just how these two technologies are different from each other, and how they help to improve the security of the card payments ecosystem as a whole. Learning a little more about these two types of platforms can go a long way toward getting everyone onboard with the technologies.
The first thing to keep in mind about both EMV and mobile payments – which utilize near-field communication, or NFC, technology – is that they are safer to use than traditional magnetic strip credit card technology. EMV, also known as chip-and-PIN, is harder to copy because the embedded microchips in cards generate unique codes to push a transaction through every time they’re used. Further, they require users to enter a PIN code to verify a transaction, rather than simply signing for it. Meanwhile, NFC mobile payments have similar security protocols built in, but can add extra layers of security when mobile payment app developers build in additional means of verifying the device user.
Getting up to speed with EMV
Most of the developed countries around the globe are ahead of the U.S. on implementing EMV – which stands for Europay MasterCard Visa, the companies that pioneered the technology – for the vast majority of their payment ecosystems, according to Ripple Shot. Many more are, like the U.S., just getting caught up with much of Europe and Central America.
The reason the U.S. in particular has lagged behind is that the cost of replacing hundreds of millions of debit and credit cards with new EMV chips was prohibitive. But payment fraud became so prevalent that payment processors and card issuers saw little choice but to shift liability onto merchants as a means of incentivizing a switch to more secure methods, the report said. Since the initial liability shift, the vast majority of payment cards and a growing share of merchants nationwide are now EMV-capable, and fraud is falling as a result.
Understanding mobile payments
Meanwhile, NFC-based mobile transactions are on the rise as well, thanks in large part to a significant push from platform developers and tech giants, according to Retail TouchPoints. However, there has been some concern about the security of these transactions, likely based on the idea that phones can be lost or stolen in a similar way to traditional credit cards. The good news, though, is that consumer interest seems to be driving use of these platforms forward, even if more ground needs to be made up.
For these reasons, it might be wise for merchants of all sizes that have not yet moved to adopt mobile and EMV payments as part of their strategy to do so in the near future. As these payment methods become more common, consumers will expect to be able to use them whenever and wherever they want. Consequently, having the point-of-sale devices to handle both types of purchases ready to go is likely to pay off soon, even if there is some initial trepidation among shoppers, according to Payments Source.Back To Blog