How EMV Specifications Support E-Commerce – Digital Transactions
The increasing digitization of global economies, along with the unprecedented growth in e-commerce, means consumers and businesses are demanding more payments. A recent report from the Federal Reserve Bank of Boston notes that “consumers not only have higher expectations for online security, but they also expect their digital transactions to be faster and more convenient.”
But as digital payment volumes skyrocket across various channels, inconsistent processes and fragmentation are undermining the ability to deliver a secure and seamless online experience. To meet these challenges, a coherent and joint approach is clearly needed. This is why global initiatives such as the EMV specifications have a vital role to play.
Consider the EMV chip specifications, which provide a template for smart cards and terminals to work the same no matter where they are used. With more than 10 billion EMV smart cards currently in circulation around the world (and 1 billion in the United States alone), this success provides a model for bringing consistency to e-commerce. For this reason, EMV specifications have evolved beyond the EMV chip to support technologies that enable reliable and convenient online trading.
EMVCo has developed the EMV 3-D Secure (EMV 3DS), EMV Secure Remote Commerce (EMV SRC) and EMV Payment Tokenization specifications. These technologies can be used together or separately and, like all EMV specifications, are available royalty-free to allow their universal and consistent use.
EMV SRC specifications enable common electronic payment to consumers, Click to Pay, and provide the ability for all merchants, regardless of size, to offer reliable, secure and convenient card payments to consumers shopping online. .
EMV payment tokenization is the process of replacing a consumer’s Primary Account Number (PAN) (the long number on payment cards used to make purchases) with a unique payment token. This gives consumers and merchants the ability to protect payment data throughout a transaction to ensure security.
And EMV 3DS is fraud prevention technology that allows consumers to authenticate with their card issuer. EMV 3DS supports data and risk-based decision making that encourages frictionless authentication and minimizes the potential for false denials. For most transactions, the consumer clicks or types online and the payment is approved, while higher risk transactions, reassuringly, still require an extra layer of security, such as biometrics.
The benefits these technologies offer to the US payments industry are obvious. The US Payments Forum continues to “encourage the implementation of anti-fraud tools such as [EMV] 3DS, [EMV] Secure distance commerce and others. And the Atlanta Federal Reserve commented that “the [U.S. payments] the industry is undoubtedly in a much better position today to mitigate [card-not-present] fraud than it was at the start of EMV adoption in other countries.
Of course, the job is not done. The Federal Reserve Bank of Boston stresses that “industry stakeholders should work together to […] ensure that common industrial protocols are aligned, interoperable and scalable. This is exactly what EMVCo does.
EMVCo works with hundreds of organizations around the world to develop and advance EMV specifications. For e-commerce, this has included working with the merchant, travel and video game communities to understand and meet specific requirements. The latest iteration of the EMV 3DS specification (to be released this year) demonstrates this expanded commitment and includes various enhancements to meet industry needs for security, performance and user experience.
EMVCo also works in close collaboration with other industry associations and technical bodies. For example, in 2019, EMVCo, FIDO Alliance, and W3C collaborated to create the Web Payments Security Interest Group (WPSIG) to improve the security and interoperability of web payments. The group’s charter is now being renewed until at least 2023.
Continuing this broad collaboration is essential as EMV specifications continue to evolve to meet the new challenges and opportunities presented by e-commerce, including the growth of transactions through voice-activated devices and IoT, the scrambling of experiences. in-store and online payment methods, and the increasing sophistication of fraudsters.
—Brian Byrne is Director of Engagement and Operations at EMVCo.