How does EMV help prevent fraud?

The chip on the EMV card is very difficult to duplicate. Each EMV-enabled card contains an embedded smart chip that is programmed by the card issuer to create a unique cryptogram (an encrypted code) for every transaction. This code represents a randomly generated numeral provided by the POS terminal at the time that the purchase amount is keyed in by the cashier. When an EMV chip is used in a transaction, a cardholder verification is triggered and becomes required for authentication via Chip and PIN or Chip and Signature. If connectivity with the card issuer is unavailable during a transaction, the chip determines whether the transaction can be processed offline.