What is an EMV Chip Card, and How Does it Store Your Data?

  • By Bryan Lee
  • Jan 05, 2024

What is an EMV Chip Card

For over a decade, the magnetic stripe was the authentication tool behind modern-day credit cards. Magnetic stripe technology was developed in the late 1960s, but it took time before widespread use. It wasn't until 1994 that EMV technology was developed, leading to the cards with the little chips embedded in them. Europe quickly embraced the EMV chip card, but the United States and Canada have taken longer. Today, EMB chips are used to authenticate most of the card-based transactions in the United States and in most other developed countries. EMV chip technology is impressive, and it makes transactions significantly safer than they were with magnetic stripes. EMV stands for Europay, MasterCard, and Visa, all the major companies behind the original development of the technology. Today, most card-based transactions rely on this chip, but how does it work? What is EMV, and why should you be using it whenever you can?

The Technology Behind the EMV Chip Cards

Each EMV chip card is a powerful device that makes credit card payments significantly more secure. Those tiny chips embedded into the face of your cards rely on advanced EMV technology that keeps you safer each time you complete a purchase. The chips are microprocessors that track transactions, store your card information, and generate tokens for authenticating your purchases. Each microprocessor is unique to the card it's installed on, and these technological wonders can make buying products significantly safer than using magnetic stripes to checkout. 

How EMV Cards Differ from Magnetic Stripes in Data Storage and Processing

While magnetic stripes simply store your card number and details for payment processors to read and use, an EMV card does things differently. Instead of giving up your card number, it gives a harmless token value that cannot be exploited by attackers. A magnetic stripe is like a basic number storage device, while an EMV chip is an advanced microprocessor that does real-time work to keep your information secure. 

Components of an EMV Chip Card

Each EMV card is made of simple components you're likely familiar with already. The card has your card number, expiration date, and a CVV code. This security code helps to protect you from credit card fraud.

Most EMV chip card products also have a magnetic stripe meant to serve as a backup for payment processors that don't yet accept EMV technology. Finally, there is a small microprocessor chip on the face of the card. This is the tool that communicates with a payment terminal, enabling you to safely make purchases at connected terminals in different parts of the world. 

How EMV Chip Cards Store and Protect Data

Clever EMV software enables the microprocessor chip on each card to contain personally identifiable information without making it available to criminals attempting to exploit it. While your card number, expiration date, and other key details are kept on the EMV chip, that data is not transmitted like it is when using a magnetic stripe. Instead, a nearly harmless token is used in its place. This powerful difference makes EMV chip transactions significantly safer for chip card holders. Using EMV technology and getting a service to help you monitor your credit will help keep you safe financially. 

Explanation of Data Encryption and Storage Mechanisms

Secure card data is held on an EMV microprocessor, but attackers cannot directly read that information off the chips because they aren't designed to allow it. Instead, when prompted, the microprocessors send out a random token value, and when prompted again, they send out a different token value. Data encryption is not necessary when making purchases using an EMV chip card because the card number itself is never transmitted, and there isn't essential data to protect. 

Role of EMV Chips in Transaction Verification and Authentication

The genius of EMV technology is how each EMV microprocessor uses the data stored within to safely enable transactions to occur. Each microprocessor sends out token values that only mean something to approved payment processors. All these processors are managed by EMVCo, the governing company that oversees all EMV chip transactions for all the major card companies. When you attempt to make a purchase, your EMV chip card sends out a random token value that's transmitted over the internet to a payment processor. That processor uses the token number to check your information and verify you have money to complete the purchase. Once it's approved, a message gets sent back to the terminal, and your transaction is complete. Throughout the transaction process, your credit card information was never available, and a nearby hacker could not steal your data. 

Additional Security Features

The heart of the security that makes each EMV card useful is the tokenization of your card number and expiration date. Aside from using tokens instead of your valuable information to authenticate transactions, the cards normally demand you input a PIN as well. This is another layer of security that helps prevent unauthorized users from leveraging your card to make purchases. Some cards also demand user signatures as authorization and it's possible to be required to input a PIN and to sign for a purchase, but this is unlikely today. 

The Benefits of EMV Chip Cards

The Benefits of EMV Chip Cards

The biggest benefit of EMV cards is the special EMV technology that makes most transactions more secure. The cards avoid sharing your card number and expiration directly, which makes it much more difficult for attackers to steal and abuse your information. While attackers can still physically steal and abuse your physical credit cards, they cannot steal the data from the card at the terminals any longer. In-person payment transactions are significantly safer because of EMV chip technology, so when you choose a credit card, ensure it comes with an EMV chip. 

The Importance Of Adopting EMV Chip Cards

If you're still avoiding EMV chip cards, you can benefit by using them in place of magnetic stripes whenever possible. Today, most American vendors accept chip cards, and buyers should rely on chips or tap-to-pay technologies to keep themselves safe when making purchases. EMV chips aren't any more difficult to use and could help protect you from different types of credit card fraud.

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