Cryptogram, in card payments, is a one-time cryptographic value generated by a card chip, mobile wallet or token service for a single transaction, letting the issuer confirm that the payment came from a genuine card or device and that its data was not altered or replayed. In EMV, the chip produces an ARQC by running a MAC algorithm, over the amount, currency, date, a terminal random number and an application transaction counter; the issuer's hardware security module repeats the calculation to verify it. Because each value is bound to one amount, counter and random number, captured data cannot be reused. Apple Pay, Google Pay, network tokens and 3-D Secure values such as CAVV apply the same model.
What is a payment cryptogram
Several cryptograms appear in a card's life. In EMV chip transactions the card produces an ARQC (authorization request cryptogram) when it wants the issuer's online approval, a TC (transaction certificate) when a transaction is approved, and an AAC (application authentication cryptogram) when it declines. The issuer answers with an ARPC, proving to the card that the response is authentic. For tokenized payments, the token service generates a cryptogram that accompanies each use of a network token. In 3-D Secure, the issuer's authentication value (Visa's CAVV, Mastercard's AAV) is a cryptogram proving the cardholder was authenticated.
Card transaction cryptogram explained step by step
At personalisation, the issuer loads the chip with a unique card key derived from its own master key. For each transaction the chip derives a session key using its application transaction counter (ATC), which increases by one with every use. It then runs a MAC algorithm, usually 3DES or AES, over the transaction data: amount, currency, country, date, transaction type, the terminal's unpredictable number, the ATC and the terminal's verification results. The output, typically 8 bytes, is the ARQC.
The issuer's hardware security module repeats the same derivation and calculation. A match proves the card holds the genuine key and that none of the covered fields changed in transit.
Why cryptograms stop counterfeit and replay fraud
Magnetic stripe data is static: copy it once and it works forever. A cryptogram is bound to one amount, one terminal random number and one counter value. An ARQC captured on a €23.50 coffee purchase is useless for a €900 purchase, and replaying it for another €23.50 fails because the counter and random number no longer match. A counter that jumps backwards or repeats also signals a cloned chip.
Cryptograms in wallet and online payments
Apple Pay and Google Pay bring the chip model to phones. A contactless tap with a phone carries a device token plus a fresh cryptogram, and in-app or browser wallet payments carry one too, giving a remote purchase the dynamic data normally seen only in a card-present transaction. Merchants that store network tokens for returning customers request a new cryptogram from the token service for each customer-initiated payment, which is one reason network-tokenized transactions tend to see higher approval rates than raw card numbers.