FACTS ABOUT CREDIT/DEBIT CARD - EMV VS. MAGNETIC STRIPE… Which is more secure?

EMV Chip and Pin card simply put is the type of credit/debit card that requires you to first insert the card into the terminal (ATM, POS etc) then type in your PIN to process transaction. Transactions that are done using the EMV cards are being checked against security certificates and remote pieces of /'account information all along the payment-processing chain.

This starts immediately the card is inserted into the terminal and the chip
begins to “communicate” with the terminal to create the transaction request.
This request is based on a combination of pieces of information found both in
the terminal and on the customer’s card. We will talk about this transaction
process in a bit.

For the Magnetic stripe card, the card holder does not need to go through the
process of inserting the card into a terminal and trying to remember their
PIN for card, all you just need is to swipe your card on the terminal and
Bingo! the card immediately communicates with the terminal and the rest is
history.
Magnetic-stripe card has been the credit-card standard for generations. But a
new standard (EMV) has taken over major markets throughout the world, and the
U.S. is now poised to make the transition throughout the upcoming year.
Now to the big question, which is more secured? We will look at both cards
transaction process shortly, and the facts on ground will help in
understanding and deciding on which is much more secured.

TRANSACTION FLOW FOR MAGNETIC STRIPE CARDS ON THE TERMINAL
1. Cardholder swipes the card through the terminal during transaction
2. Terminal sends an authorization request to Acquirer(Card Processing Company)
3. Acquirer sends the same authorization request to issuer(Cardholder’s Bank)
4. Issuer responds to Acquirer on whether or not account is fine for that transaction
5. Then Acquirer responds back to Terminal with information from the Issuer

This communication process only takes few seconds and both cardholder and
merchant are notified and transaction goes through.

TRANSACTION FLOW FOR EMV CHIP AND PIN CARDS ON THE TERMINAL
1. Cardholder inserts card into the EMV Terminal
2. Card sends an online authorization request to Terminal
3. Terminal sends same authorization request to Vantiv(Card Processing Company)
4. Vantiv sends same request to Issuer(Cardholder’s Bank)
5. Issuer responds to Vantiv on whether or not account is fine for that transaction
6. Then Vantiv responds back to Terminal with information from the Issuer
7. If Cardholder’s account is fine and has sufficient fund for the transaction, account
    will be debited and cardholder gets a debit alert.
8. Card is removed from the EMV Terminal.

Just to add, cardholder is always notified to type in their secured PIN after
inserting the card into the EMV terminal and they select transaction type
that they wish to initiate.

With all we have said so far, I think we can safely say that the EMV Chip and
Pin Card is much more secure than the Magnetic Stripe Card as cardholder must
type in their card pin to use the card on a terminal unlike the magstripe
where you don’t need a pin, with just a swipe, and transaction is authorized.

We have had cases in the past where cardholders complained of an unauthorized
transaction on their account using their EMV cards. Yes, for the fact that it
has a security Pin attached to it does not mean it is not susceptible to
fraud, it is when your Pin falls into the wrong hands or when somebody was
able to guess your Pin correctly and at the same time has your card or
information on your card, they will definitely carry out unauthorized
transactions on your account. Unlike the Magstripe card that the fraudster
does not need to have your Pin or stress their head in trying to guess
whether you used your birthday or anniversary as your Pin.
In a nutshell, the EMV Chip and Pin card is much more secured than the
Magnetic stripe card.

There you have it, difference between the EMV and Magstripe card. Feel free
to add a suggested or contribution on what you think we missed.