One Time PasswordsEMV Authentication: Fraud
What is skimming?
The magnetic stripe at the back of the card contains several data. A 'skimmer' copies these data onto a different magnetic stripe.
EMV prevents this problem by protecting the card number and authentication data cryptographically. Therefore, data cannot be forged or misused.
How does counterfeiting work?
Counterfeit credit cards have the same look and feel as a legitimate credit card. However, the data embossed in the front of the card, do not match the data encode on the magnetic stripe.
The data on the magnetic stripe can be obtained through skimming or may be damaged or even entirely absent. When paying, the merchant will use a manual imprint process instead of network authorization.
Thanks to strong EMV cryptography, the chip is authenticated to the terminal (and vice versa) as well as to the host system.