The EMVCo Update Simplifies NFC Contactless Payments

• EMVco, the organization that sets global specifications for secure payments, has created a new standard payment kernel.
• Standard payment kernels will help bring uniformity to the contactless payment landscape and increase the speed and affordability of payment systems.

The complex world of payments is about to get a little bit simpler thanks to EMVCo. A new EMVCo protocol has provided a standardized kernel to reduce the cost and increase the speed of NFC contactless payments. In case you’re not an EMVCo expert, this blog will give you a quick overview of what EMVCo does and how kernels work before outlining the changes to kernels and how they can simplify your payment systems.

EMVCo is an organization that sets global specifications for secure payments to compensate for the variances of different card networks. EMVC’s standard specifications are put in place to ensure payment security standards are upheld and compatibility between payment networks is maintained. Created by six major payment networks (Visa, Mastercard, Amex, Discover, JCB, and UnionPay), EMVCo has a large role in shaping the rules of the payment world.

Every stakeholder, from merchants to financial institutions, must be compliant with EMVco if they want to remain compatible with other payment technologies. For this reason, changes to EMVco specifications cause widespread changes to the payments industry as a whole.

Contactless payment technology has evolved quickly in recent years, especially as the pandemic made contactless options preferable for consumer safety. Unfortunately, the rapid global adoption of contactless payments has proved quite the standardization challenge, especially when it comes to contactless payment kernels.

Contactless kernels provide processing logic and data to enable contactless transactions. Kernels must be approved by EMVCo before they are used as a part of terminal payment applications. Kernels are a complicated part of the payment process, but the important thing to know is that kernels foundationally support contactless transactions.

Currently, merchants collecting contactless payments must use multiple kernels in order to utilize multiple payment systems. Because kernels did not develop uniformly, around two dozen kernels exist globally. Some merchants are even required to juggle up to seven or eight kernels in total to support the terminals they’re using.

Using multiple kernels is inefficient, and often translates to slower payments and higher costs across the payment ecosystem. Because of this, EMVCo started working on a solution to address this problem in 2019.

Instead of finding a way to connect these kernels, EMVCo decided to provide a standard kernel of their own that will work globally. The EMV Contactless Kernel Specification will simplify the kernel conundrum by providing a standardized kernel for payment systems.

The new kernel will add privacy technology and elliptic curve cryptography for added security. Multiple firms, including Visa and MasterCard, are working to produce the new EMV kernel. However, EMVCO will not enforce kernel migration, and stakeholders are allowed to decide when and if to deploy the new kernel.

While the new kernel will not necessarily eliminate the other kernels currently in use, it will provide a needed standardized kernel. Even if all kernels are not removed from the payment ecosystem, reducing the need for multiple kernels will simplify and streamline the currently complicated world of contactless kernels.

Using a uniform kernel will simplify payment acceptance, which in turn will reduce the cost and increase the speed of accepting payments. Because of the benefits to the entire payment ecosystem, wide adoption of the EMVCo kernel is likely.

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