How does the EMV chip in bank cards work

[chushpan]

What is an EMV chip?​

An EMV chip is a microprocessor built into a bank card that ensures secure transactions. EMV (Europay, MasterCard, Visa) technology was developed to replace magnetic strips, which are vulnerable to copying and fraud. The chip contains secure data and performs complex cryptographic operations to authenticate the card and protect transactions.

How does an EMV chip work?​

The EMV chip works as a miniature computer that communicates with the terminal and the bank via secure protocols. The process can be divided into several stages:

1. Initializing a transaction​

When the card is inserted into the POS terminal or applied to a contactless reader:

1. The terminal sends a RESET command to the chip.
2. The chip responds with ATR (Answer To Reset), which contains information about supported protocols and communication parameters.
3. The terminal selects an application (for example, the Visa, MasterCard, American Express payment system) on the chip.

2. Generating authentication data​

The chip prepares data for authentication:

1. Transaction details:
   • Purchase amount.
   • Unique terminal number.
   • Date and time.
2. Unique card data:
   • PAN (Primary Account Number) — card number.
   • Validity period.
   • ATC (Application Transaction Counter) is a transaction counter that increases after each operation.
   • UN (Unpredictable Number) is a random number provided by the terminal.
3. Generating ARQC (Authorization Request Cryptogram):
   • The chip uses a secret key and an encryption algorithm (such as 3DES or AES) to create an ARQC cryptogram.
   • ARQC is unique for each transaction due to the use of ATC and UN.

3. Transferring data to the bank​

The terminal sends data to the processing center of the issuing bank:

1. ARQC is a cryptogram for card authentication.
2. Transaction details - amount, currency, terminal information.
3. Additional data - for example, country code, card type.

4. ARQC check by the bank​

The issuing bank checks the ARQC:

1. The bank uses the same secret key and encryption algorithm as the chip to recreate the ARQC.
2. If the ARQC matches, the transaction is considered legitimate.

5. Bank Response (ARPC)​

After verification, the bank sends back an ARPC (Authorization Response Cryptogram) :

1. ARPC confirms successful authentication of the card.
2. The terminal completes the transaction (e.g. prints a receipt).

Main functions of EMV chip​

1. Data storage:
   • The chip stores secure information such as PAN, expiration date, secret keys.
2. Generation of cryptograms:
   • Creating ARQC for card authentication.
   • Generating other cryptographic data to secure transactions.
3. Executing commands:
   • The chip can execute commands sent by the terminal, such as reading data, writing new parameters.
4. Cloning protection:
   • Each chip has a unique serial number and secret keys that cannot be copied.

Advantages of EMV chip​

1. Fraud protection:
   • The chip protects data from interception and forgery.
   • Cloning a chip is almost impossible.
2. Uniqueness of each transaction:
   • ARQC and other data are generated anew for each transaction, making them invalid when reused.
3. Compatibility:
   • EMV chips support international standards, allowing cards to be used worldwide.
4. Contactless payment support:
   • Modern chips work with both contact and contactless terminals.

What algorithms are used?​

1. Encryption:
   • DES/3DES (Triple Data Encryption Standard).
   • AES (Advanced Encryption Standard).
2. Hashing:
   • Algorithms such as SHA-1 or SHA-256 for creating digital signatures.
3. Asymmetric encryption:
   • In some cases, RSA is used for additional security.

Example of EMV chip operation​

Scenario: Payment at a restaurant​

1. The client inserts the card into the terminal.
2. The terminal sends a request to the chip.
3. The chip generates ARQC and sends it to the bank.
4. The bank checks the ARQC and sends the ARPC.
5. The terminal completes the transaction and issues a receipt.

Difference between chip and magnetic stripe​

Parameter	Magnetic stripe	EMV chip
Safety	Easy to clone	Protected from cloning
Uniqueness of data	Static data	Dynamic data for each transaction
Cryptography	No	Yes
Complexity of attacks	Low	High

Conclusion​

The EMV chip is a modern technology that significantly increases payment security. It protects the card from fraud, ensures the uniqueness of each transaction and complies with international standards. Understanding the principles of the EMV chip is important for payment system specialists, terminal developers and card users.

If you have additional questions about the EMV chip or its application, please clarify them!

 

[Man]

EMV (Europay, Mastercard, Visa) is a standard for chip cards that ensures transaction security. Unlike a magnetic strip, the chip generates a unique code for each transaction, making cloning virtually impossible.

1. EMV chip structure​

• Microprocessor: Performs cryptographic calculations.
• Memory: Stores data:
  • PAN (card number),
  • Validity period,
  • Cryptographic keys,
  • Applications (Visa/MC/Proton etc.).
• Contact pad (or antenna for contactless cards).

2. How does the transaction proceed?​

2.1. Contact payment (inserting a chip into the terminal)​

1. Initialization: The terminal supplies power to the chip and sends a request.
2. Authentication:
   • The chip confirms the card's legitimacy through a static (SDA) or dynamic (DDA/CDA) algorithm.
   • For DDA, the terminal sends a random request, the chip signs it with its key.
3. Cryptogram generation:
   • The chip creates a unique code (ARQC – Authorization Request Cryptogram) based on:
     • Payment amounts,
     • Terminal numbers,
     • Random number.
4. Bank verification: The bank decrypts the ARQC and confirms the transaction.
5. Finalization: The chip receives a response from the bank and generates a TC (Transaction Certificate) – confirmation of successful payment.

2.2. Contactless payment (NFC)​

The principle is the same, but the data exchange occurs via RFID (ISO 14443). For transactions up to a certain amount (usually ~$50) no PIN is required.

3. Why is EMV safer than magnetic stripe?​

• Dynamic codes: ARQC/TC change for each transaction. Even if the data is intercepted, it cannot be reused.
• Offline verification: The terminal can verify the authenticity of the chip without communication with the bank (using PKI keys).
• Skimming protection: Magnetic stripe can be copied, but chip is extremely difficult (requires physical access and cryptography cracking).

4. Is it possible to bypass EMV protection?​

Theoretically, yes, but the methods are complex and unprofitable:

1. Terminal attack: Substitution of firmware to read keys (rare).
2. Physical chip hacking: Microscope + probes to extract keys (expensive and requires expertise).
3. MITM attack: Interception of data between the chip and the terminal (but the cryptogram is one-time).

In practice, carders prefer:

• Cloning the magnetic strip (if any),
• Social engineering (phishing, SIM swapping),
• Online fraud (CVV leaks).

5. EMV and transaction blocking​

• If the chip is damaged, the terminal may request a magnetic stripe, but the bank often rejects such transactions.
• If fraud is suspected (e.g. cryptogram mismatch), the transaction is blocked.

Conclusion​

An EMV chip is a "mini-computer" that:
✔ Generates unique codes for each transaction,
✔ Checks the card's legitimacy offline,
✔ Is difficult to hack due to cryptography.

Important: Modern cards with a chip are almost impossible to clone. Fraudsters work with outdated systems (magnetic stripes in the US) or bypass protection through social engineering.

If you are interested in technical details (for example, the format of APDU commands or working with Java Card), ask!