What's the difference between EMV and RFID?

In the current financial market, smart payments have become the norm. In recent years, Apple Pay, Android Pay, Samsung Pay, and NFC payments via cards have all gained immense popularity.

The technology that enables these payments, however, is not new. It has been around for more than two decades. Seoul Bus Transport Association introduced the first contactless card in 1995.

What has changed in all these years? Smart payments are only now seeing a surge in adoption. Why is this?

The answer lies in the complexity of the security protocols used by these payment methods. EMV vs. RFID are two of the most popular technologies used for contactless payments.

EMV - what is it?

This standard was originally developed by Europay, Mastercard, and Visa.

Cardholder data is stored and protected by a special microprocessor chip embedded in EMV chip cards. Each time you make a purchase, this chip creates a unique transaction code.

As a result, EMV chip cards are much more secure than traditional magnetic stripe cards. EMV is currently the most secure method of processing credit and debit cards.

Making a payment with an EMV chip card requires contact with a point-of-sale (POS) terminal. You must insert the card into the terminal and leave it there until the transaction is complete.

Modern EMV cards incorporate NFC technology, allowing them to be used for contactless payments as well. NFC-enabled POS terminals and mobile devices can use EMV chip cards.

RFID: what is it?

RFID is an acronym for Radio Frequency Identification. Tags attached to objects are automatically identified and tracked using electromagnetic fields.

Tags contain electronic information that can be read from a distance. A RFID tag can be low frequency (30-300 kHz), high frequency (3-30 MHz), or ultra-high frequency (300-3000 MHz).

RFID is used for a variety of applications, including contactless payments. RFID tags are usually embedded in credit or debit cards in this case. The RFID tag on your card is read when you tap it on a terminal.

For contactless payments, NFC (a high-frequency branch of RFID) is more common. In comparison to regular RFID, it is regulated by ISO/IEC 14443 and offers a higher level of security.

RFID vs. EMV - Comparison

Let's compare and contrast EMV and RFID now that we've explained what they are:

• Use mode

Physical contact with the POS terminal is required for most EMV chip cards. During the transaction, the card must be inserted into the terminal.

EMV chips are read by terminals equipped with readers. Payments are processed using this data.

Additionally, these cards have a complex chain of security events that must be completed before a payment can be processed. As part of this process, the cardholder's identity is verified and the transaction is authorized.

To complete a transaction, RFID payment cards only need to be placed near the terminal. RFID tags store data that is read wirelessly and used to process payments.

Therefore, both cardholders and merchants benefit from this technology. When making a payment, cardholders don't have to fumble with their cards. Moreover, merchants don't have to worry about EMV terminal issues, such as misaligned readers.

RFID is slowly replacing EMV as the preferred method of contactless payments due to its contactless advantage. To allow contactless payments, some EMV cards now have NFC chips.

• Keeping the peace

EMV is widely considered to be the most secure way to process credit and debit cards. The reason for this is that counterfeiting EMV chip cards is very difficult.

In addition, EMV cards generate a unique transaction code that cannot be reused. As a result, fraudsters cannot use stolen data to make purchases.

The security of RFID payment cards is also very high. RFID tags are encrypted, making it difficult for fraudsters to read and decode the data.

RFID payment card issuers have also implemented security measures, such as tokenization. The cardholder's account number is replaced with a unique token during this process.

This prevents fraudsters from using stolen data to make purchases. It would be impossible for them to do anything with the RFID tag even if they could read and decrypt its data.

• The cost

It is more expensive to produce EMV chip cards than regular magnetic credit and debit cards. They require a special chip to be manufactured and installed on the card.

Furthermore, EMV terminals are more expensive than regular POS terminals. They must be equipped with an EMV reader. RFID terminals are no different.

However, the cost of EMV and RFID cards and terminals is slowly decreasing. In the future, economies of scale will drive down the cost of these technologies as their use becomes more widespread.

What are the disadvantages of using EMV and RFID?

Using EMV and RFID technology has a few disadvantages, including:

• The cost. The upfront costs of implementing EMV or RFID may not be affordable for small businesses. The cost of purchasing new terminals and training employees can be prohibitive.

• The compliance process. Although EMV is a global standard, not all countries have adopted it. It can be difficult for businesses that operate in multiple countries to comply with different standards due to this.

• Protecting your privacy. People are concerned about the privacy implications of EMV and RFID. They are concerned that their data will be stolen and used without their knowledge or consent. In spite of this, these technologies are very secure and there is little chance of data being stolen.

RFID vs EMV - Which is better?

This question cannot be definitively answered. Depending on the business's needs. People will, however, prefer RFID's contactless convenience over EMV's extra security.

There are advantages and disadvantages to both technologies. At the end of the day, the decision is up to the business.