The Technology behind EMV®¹ Credit Card Smart Chips and Tokenization

The article content is provided with our sponsor, Bank of America Merchant Services.

By now, you’ve likely heard about how you’ll be getting — if you haven’t already — new debit and credit cards because of something called EMV. So, what is EMV? It’s a new “chip” card technology that heightens security through the use of stronger authentication to reduce the value of stolen data. EMV offers consumers, vendors and banks an increased level of security.


EMV: What it is EMV and how does it work?

EMV® stands for EuroPay, MasterCard® and Visa®, who originally formed the joint effort. It is now managed by EMVCo, which is overseen by EMVCo’s six member organizations — Visa®, MasterCard®, Discover®, American Express®, JCB and UnionPay.

Instead of storing data on a magnetic stripe like the cards we’re familiar with, EMV cards hold that information on an embedded microchip. EMV cards can be processed either by a card reader physically contacting the chip (contact transactions where the card is inserted into the terminal) or by the reader being sufficiently close to the chip to detect it and exchange data (contactless transactions). During a payment transaction, the chip performs cryptographic

processing. This provides a unique code for each transaction, which prevents the data from being fraudulently reused.

Because EMV cards don’t hold static data, they are considerably harder to counterfeit. For those interested in learning more about EMV, Bank of America Merchant Services has created a white paper that helps explain the history and methodology behind the standard.


EMV and Tokenization

Lastly, you may have heard some talk about EMV and tokenization. A recent Tech News World post² defines tokenization as “the process of breaking a stream of text up into words, phrases, symbols, or other meaningful elements called tokens. The list of tokens becomes input for further processing such as parsing or text mining.” When retailers employ tokenization, sensitive data like credit card numbers and PINs are replaced with useless, randomly generated token data while a transaction is being completed. The element of randomization involved means that hackers can’t engineer a key to unlock the encoded data — a vulnerability that exists in even the best encryption processes. The Bank of America Merchant Services EMV white paper reminds merchants that they play a big role in keeping sensitive data safe. “With EMV using enhanced authentication to address counterfeit issues in face-to-face transactions, it is still critical to transmit consumer data from your business using an encryption and tokenization solution.”



To learn more about the EMV and how it affects your business, review or contact a Bank of America Merchant Services business consultant.

¹EMV is a registered trademark in the U.S. and other countries, and an unregistered trademark elsewhere. EMV® is a registered trademark owned by EMVCo LLC.

² Tech News World,



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