EMV Cards….. Providing Dynamic Authentication Processes
Currently, EMV (Europay, MasterCard, and Visa) chip cards are now the “trending topic” in the payments industry. EMV supplies authentications and security measures to help business owners and issuers reduce fraud. This new technology has left business owners with no choice than to educate themselves on EMV chip cards and upgrade their terminals and POS systems to accept these types of payments.
An EMV chip card is designed to go through a lot of authentications to produce additional security. All EMV chips are to go through static data authentication (SDA), dynamic data authentication (DDA), and combined dynamic data authentication and application cryptogram verification (CDA). These authentications are made possible due to the increased data byte storage, which has improved from a 26-byte maximum with mag stripe to 259 bytes of data storage on the EMV chip.
It is possible to permit the payment of a chip-based transaction using either an online or offline process. When online authorization is used, business or transaction information is sent to the card issuer for confirmation. But when an offline process is used, the information based on that transaction is transferred from the terminal directly to the chip card itself for authorization by the chip. Transaction authorization is determined by issuer-defined risk parameters stored in the chip, and not direct approval by the issuer. A hybrid process is also possible, whereby cardholder verification is conducted via offline PIN, and the transaction itself is authorized through online communication.
Online and offline authorization options both have advantages. The online authorization allows for an additional layer of security and fraud protection, since most fraud mitigation tools function online, in real-time. Online authorization also simplifies chip production, encryption key management, and merchant infrastructure, and it saves cost and reduces overall complexity. The primary advantage of allowing offline authorization is that it is consistent with global standards, ensuring compatibility and interoperability with international issuers’ payment devices. In addition, it allows for transaction authorization functionality even in the absence of online connectivity.
EMV has been successful at reducing fraud in countries that have been using this technology. EMV is being adopted at a steady pace by issuers, networks, and business owners throughout the United States. This technology will provide dynamic authentication processes in order to provide more security and protect business owners and issuers against fraud.

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