The EMV Standard
Reducing Counterfeit Card Fraud
The EMV standard was developed in the 1990s to mitigate card-present fraud in Europe and other markets where online, real-time connectivity to issuers’ authorization systems was not widely available. The unique data provided by the EMV chip embedded in payment cards with this standard makes it nearly impossible for fraudsters to produce counterfeit cards. Fraud related to counterfeit cards has essentially been eliminated in countries where EMV was widely adopted.
Reducing Card Theft Fraud
The incidence of two other types of fraud—lost/stolen and card-not-received fraud—has been greatly reduced as well by requiring EMV cardholders to enter a personal identification number (PIN) rather than a signature when they perform a transaction using their EMV cards to verify that the customer is the legitimate cardholder and not someone using a stolen card. The earliest implementations of EMV used offline PIN, whereby the chip itself verifies the PIN. Other markets have used online PIN verification, with the PIN verified with the issuer online in real time. Some issuers prefer online verification because offline PIN capabilities require a more expensive chip solution.