Difference between magnetic stripe and EMV smartcards

A big difference between traditional magnetic stripe cards and the new EMV smartcards, as defined by the EMV standards is the introduction of cryptography, which enables to assure the integrity and confidentiality of the interchanged data in an operation among the cardholder and the acquirer and/or issuer.

EMV is the reference standard for other financial applications because it defines the characteristics of the interface between a card and a terminal and the application selection.

The smartcards that comply with EMV standard contain certificates and cryptographic keys, which are used when the cardholder performs a payment operation, assuring the integrity and confidentiality of the operation data, apart from authenticating parties involved in the transaction (Cardholder, Acquirer and Issuer).

This new technology in Payment Systems enables the issuer, to define the functionality and behavior of its cards. For instance, the issuer can define or configure different behaviors for a card if used in national or international environment.

The EMV application coexists or can coexist with other financial or private applications on the card as well as on the terminal or POS.

Impact of the new technology in the card issuance process

Cards based on magnetic stripe are used since quite long, in consequence, the issuer organizations have procedures and computer systems to issue these sort of cards, the so called personalization process. This process consists in obtaining the cardholder data, create a file with them and send them to a internal or external service responsible for card generation.

There is a lot more activity involved to issue an EMV smartcard in comparison to a conventional smartcard, the standards consider mechanisms to enable configuration and modifications, to these cards all over the world, their associated applications and future applications using strong cryptographic algorithms. The issuance of EMV cards provokes changes of different nature, from the generation and issuance processes, to their usage. Thus, in order to issue these sort of cards, the issuer organizations must adapt their existing systems to the new situation.

The fact that a financial card now converts from a passive support to n active support which can make decisions during a transaction, as well as additional services which are provided to the cardholders based on the applications contained within each EMV card and elements such as keys, certificates and the different configurations which these must contain to carry out operations defined by each issuer organization based on the standards, will make it compulsory to perform intermediate processes to the currently defined issuance systems.

These intermediate processes are the one provided by e-mission solution, which provides specialized modules and tools for data preparation for personalization of EMV cards which RT has developed, so that the currently used magnetic stripe personalization files could be used to generate new personalized files for EMV smartcards.

RT, offers a family of products designed for file personalization preparation process of EMV cards, from standalone solutions which practically deals with all the required tasks, to specific modules for mainframe solutions, which adapt to the Host of each organization. Additionally there are modules to generate EMV compatible applications.