• Early cards with magnetic stripe store data on a magnetic stripe that can easily be read or copied. (By far the majority of credit card use in the US is still magnetic stripe.)
  • EMV (Europay, MasterCard and Visa) Chip and PIN cards are much more secure than magnetic stripes, as the card stores encrypted data on a microprocessor chip. Data cannot be read without encryption keys, and the chip has dynamic data and cannot be copied. Fraud, common with magnetic stripe cards, is virtually eliminated due to the much greater chip and encryption key security.
  • Contactless EMV cards (PayWave™ and PayPass™) store encrypted data that can be securely exchanged using NFC for authorization through contactless terminals. Today there is an upper dollar limit per transaction (with no PIN requirement), but this is a choice by banks and merchants as the technology evolves. Future development is likely to introduce PIN-based approval for higher value transactions.  The security level is the same as inserting the card into the terminal.
  • NOW  a consumer’s EMV credit and debit card credentials can be securely downloaded by her financial institution to her smartphone, onto a secure element which is either on the SIM card or embedded into the phone itself. Instead of using a plastic card, the customer can pay by tapping or waving her phone at the same retail terminals that accept contactless cards today.  Changes to credentials can be made almost instantaneously, for even greater security, speed and convenience.  For retailers, the point of sale terminal sees the same ‘card’ credential, the same way, whether it is from a card or a phone – the interchange fee is the same. In terms of interchange fees for merchants, the system is form-agnostic.