EMV is an industry standard taking its name from the card schemes (Europay, MasterCard, Visa) that developed it, the standard covers the processing of credit and debit card payments using a card that contains a microprocessor chip at a payment terminal.

These transactions are often referred to as "Chip and PIN" because PIN entry is required to verify the customer is the genuine cardholder. This is a simplification since the EMV specifications include other cardholder verification methods as well.

Unlike magnetic stripe transactions, where typically only the card's track 2 data containing the card number and validity dates is processed, every chip card transaction contain dozens of pieces of information to be exchanged between the card, the terminal and the acquiring bank's host.

This requires the terminal to perform many stages of complex processing, including cryptographic authentication, to successfully complete a transaction. This means that adding support for EMV to existing payment applications can be a daunting task. For more info on the main processing steps required for EMV, take a look at this diagram showing a typical EMV transaction flow.

NB. The demands of providing an EMV solution do not stop once the necessary processing has been implemented...

Before an EMV-capable solution can be deployed, there are many tests that need to be passed to validate that the implementation conforms to the EMV industry standard, and as the EMV specifications are regularly updated this can become a major job in itself - another reason why many businesses who require an EMV "Chip & PIN" solution opt to license a purpose-built EMV software kernel rather than develop their own.

To understand more about the some of the terminology used in EMV, take a look at the glossary of terms.