As taken from a white paper published by FirstData
EMV is the technical standard that ensures chip-based payment cards and terminals are compatible around the world. The term refers to Europay, MasterCard and Visa, the three companies that originally developed the specifications in 1994. Today the EMV standard is managed by EMVCo, LLC, which is equally owned by American Express, Discover, JCB, MasterCard, UnionPay and Visa. Detailed information about EMV and the technical specifications are available on www.emvco.com.
A chip-based payment transaction occurs when a microprocessor, generally embedded in a plastic card or a personal device such as a mobile phone, connects to an EMV-enabled POS (contact or contactless). The smart chip securely stores information about the payments application and performs cryptographic processing. This provides an additional form of card authentication, validating the legitimacy of the payment type being used.