In today’s digital landscape, keeping track of technical jargon can be overwhelming. As a result, the distinction between technologies like EMV® chip-based contactless payment cards and NFC payments has become blurred. EMV contactless cards and NFC mobile payments share common features and represent a new wave of cross-functional payment applications that will gradually replace magnetic stripe technology, enhancing payment cards and mobile wallets.
As secure payment specialists, Datacard Group sees huge opportunity in combining the strengths of EMV contactless payment cards and the capabilities of smart phones. We’re setting the record straight about the similarities and differences between these emerging technologies – beginning with their basic definitions.
EMVCo is currently owned by American Express, JCB, MasterCard and Visa. EMV is a standard for secure transactions that take place between chip-based payment cards and the payment systems. Electronic chips are being integrated into all major payment card brands to enable secure transactions at POS terminals and ATMs. EMV is a well-defined set of specifications that covers several methods for authentication, risk management and transaction authorization. EMV contact transactions take place physically by inserting an EMV contact payment card into an EMV reader. EMV contactless transactions take place by presenting an EMV contactless card in front of an EMV reader at a short range (less than 4 cm) to enable radio frequency communication.
NFC, which stands for Near Field Communication, is a technology similar to Bluetooth that enables a radio connection between two electronic devices within proximity to each other. NFC technology isn’t directly associated with financial transactions like the EMV standards. One of NFC’s applications, however, is enabling contactless payments via mobile devices, in addition to its much broader applications for data transfer, keyless door entry and much more.
EMV standards have been commonplace in most markets for over a decade, and come October 2015, merchants in the United States who haven’t upgraded their terminals for compliance will be liable for fraud that takes place at their store and/or terminal locations. In the process of upgrading to EMV standards, many merchants will also include the contactless readers and thus will simultaneously become NFC payment ready. This changing technological landscape will set the groundwork for widespread NFC mobile payment accessibility in the US and in other markets that are on a similar path.
Is your organization equipped for the switch to NFC and EMV technology?
Sebastien Tormos, Director Mobile Solutions, Datacard Group