How do you choose between EMV and NFC for your merchant services?

1 What is EMV?

EMV stands for Europay, Mastercard, and Visa, the three companies that developed the global standard for chip-based cards. EMV cards have a small metal chip embedded in them, which stores and encrypts the cardholder's data. When you insert an EMV card into a terminal, the chip communicates with the terminal and generates a unique code for each transaction. This code is verified by the card issuer and prevents fraudsters from copying or cloning the card data.

2 What is NFC?

NFC stands for Near Field Communication, a wireless technology that allows devices to communicate over short distances. NFC cards, also known as contactless cards, have a small antenna inside them, which emits a radio signal when they are close to a terminal. The terminal reads the signal and processes the payment without the need to insert or swipe the card. NFC cards also use encryption and dynamic codes to protect the cardholder's data.

3 Pros and cons of EMV

EMV cards offer several benefits for both merchants and customers. They reduce the risk of card fraud and chargebacks, as they are harder to counterfeit or skim than magnetic stripe cards. They also comply with the EMV liability shift, which means that the party with the less secure technology is liable for any fraudulent transactions. For example, if a merchant does not have an EMV terminal and accepts a counterfeit EMV card, the merchant is responsible for the loss. EMV cards also work in most countries around the world, making them convenient for travelers.

However, EMV cards also have some drawbacks. They can be slower to process than magnetic stripe or NFC cards, as they require the card to be inserted and left in the terminal until the transaction is complete. They can also be more expensive to produce and maintain than other types of cards. Additionally, some customers may not be familiar with how to use them or may forget to take them out of the terminal.

4 Pros and cons of NFC

NFC cards offer a fast and convenient way to pay for small purchases. They do not require any physical contact with the terminal, which reduces the wear and tear on the cards and the terminals. They also reduce the waiting time and the queue length at the checkout, as they only need to be tapped or waved near the terminal. NFC cards also use encryption and dynamic codes to secure the cardholder's data, making them more secure than magnetic stripe cards.

However, NFC cards also have some limitations. They have a lower transaction limit than EMV cards, usually around $50 or $100, depending on the country and the issuer. This means that they cannot be used for larger purchases or for transactions that require a signature or a PIN. They also have a shorter range than EMV cards, which means that they can be accidentally activated by nearby terminals or interfered with by other devices. Moreover, not all merchants or countries accept NFC cards, so customers may need to carry other forms of payment as well.

5 How to choose between EMV and NFC

When choosing between EMV and NFC for your merchant service, there are several factors to consider, such as your business type, customer preferences, budget, and security needs. Some questions to ask yourself include: what kind of products or services do you sell? What are your customers' expectations and behaviors? What are your costs and resources? And what are your security and compliance requirements? For example, if you sell low-value items that do not require a signature or PIN, such as coffee or snacks, NFC may be a better option as it can speed up the checkout process. If you sell high-value items that require more verification, such as electronics or jewelry, EMV may be more suitable for you. You can survey customers or observe their payment habits to see what they prefer. Additionally, if you want to avoid the liability shift and comply with industry standards and regulations, you may need to upgrade to an EMV or NFC terminal. However, be aware of the potential risks and costs of fraud and chargebacks.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?