by Sheila Hoeppner, Senior Director, Fraud, Risk and BI, Conduent Public Sector
No doubt you’ve heard a lot about the ongoing migration to EMV chip technology, which impacts millions of Americans. You probably even use a “chip” card yourself at the grocery store. But what does it mean for the people who run — and participate in — government benefit programs? The short version is, the complicated changeover from magnetic strips to smart chips won’t happen overnight, and many different factors affect whether or when your organization should make the change.
So what is EMV? It stands for “Europay, Mastercard and Visa”, the three companies that created the standard. On the outside, the only indicator of an EMV card is the microprocessor-embedded chip, easily told apart from a traditional magnetic stripe. Some EMV cards still require contact (inserting the card in the machine) while others offer RFID chips allowing for contactless payment.
The benefits of EMV-enabled cards include increased security; drawbacks can include higher costs as well as the complexity of swapping out all existing magnetic stripe cards in your program for new ones.
How EMV Enhances Security
EMV uses “dynamic data” during transactions: each transaction carries a unique stamp which prevents transaction data from fraudulent reuse — even if cardholder data is compromised.
EMV secures transactions in three main areas:
- Card authentication: Cards are typically validated by issuers during transactions. During the transaction, a unique stamp is generated which prevents the creation of counterfeit cards.
- Cardholder verification: In the United States, cards typically support online PINs, signature signing, and no-cardholder verification (typically used for low-risk and low-dollar transactions).
- Transaction authorization: EMV transactions generate additional data, including a transaction-specific cryptogram. This enables issuers to make authorization more robust and decline decisions on each transaction.
By using advanced encryption, embedded card risk analysis capabilities and online authentication, it becomes far more difficult for criminals to steal payment and cardholder data or clone magnetic stripe technology.
How We Can Help
The process of converting to EMV poses challenges for many organizations. We’ve been helping our government clients deliver funds via chip cards since 2015. Since then, we’ve handled $20 billion securely and accurately on more than 7 million EMV-capable cards. We were the first provider to transition child support funds onto EMV-capable cards, going live in Tennessee in July 2016 and Virginia in October 2016.
And because payment cards generate so much data, they offer a powerful fraud-fighting weapon. We have algorithms and analytics for monitoring behaviors and patterns and uncovering suspicious activity — all in real time. Now, instead of lengthy, overloaded reports, we offer fraud prevention teams streamlined on-screen dashboards with a cohesive view of activity for rapid response. By analyzing that data over time and comparing active case information, a range of fraud markers can be identified.