Modern businesses are now accepting both contactless or Near Field Communication (NFC) and EMV (Europay, MasterCard, and Visa) payments. The stage of accepting magnetic-stripe cards is coming to its end. NFC and EMV are considered more secure and authenticated methods of making payments. Let’s compare magnetic stripe and EMV cards to see why smart chip cards are regarded as more secure.
- Magnetic-Stripe Cards are Out of Date – These cards have been used to make payments since the 1980s. Now, the US is one of the last countries to be still using mag-stripe cards. For decades, EMV has served as the standard in most countries.
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- EMV Cards Prevent Fraudulent Transactions – Countries that use EMV as the standard have witnessed a vivid decline in certain types of credit card transaction fraud. Here is how chip cards combat fraud:
EMV chip cards are difficult to clone. Unlike smart cards, mag-stripe cards are magnetized. When swiping mag-stripe cards, the payment processor reads the magnetic fields of these cards and matches them to the target bank account information. Data of this type is static, which makes it easier for fraudsters to take the information and clone it using a new card.
When it comes to chip cards, the data on EMV cards is not static. The fact that it is constantly changing makes it too difficult for fraudsters to extract it. For this, a fraudster should use the physical chip circuit and get manipulation over things to get the target bank information. Without having a set of high-technology equipment worth nearly $1 million, this can’t be doable. So this isn’t that much realistic for an average fraudster to complete.
- Chip Cards Boast Sophisticated Encryption Built into the Chip – Magnetic-stripe cards transfer bank information into the credit card terminal as is. When a chip card is dipped, a secret language is used to ensure sure it’s actually the very person who’s making a payment.
EMV and NFC are designed to make payment processing much more protected from fraud. As a small-business owner, you can use both EMV and NFC for payment transactions.