What is an EMV terminal capable of?

An EMV terminal is specifically designed to enhance the security of card transactions by utilizing embedded chip technology found in EMV cards. The correct answer highlights that these terminals can read cardholder data directly from this chip, which is a central feature of EMV cards. This technology provides a higher level of security compared to traditional magnetic stripe cards, as the chip generates a unique transaction code for each purchase, making it significantly harder for fraudsters to use stolen card information.

In contrast, other choices do not accurately describe the capabilities of an EMV terminal. For instance, EMV terminals do not solely accept magnetic stripe payments; while they may still support such transactions, their primary function is related to chip-based transactions. Additionally, they do not process cash transactions, as their design is focused on electronic payments. The provision of in-store loyalty rewards may be a feature offered by certain retailers or integrated systems, but it is not a fundamental function of an EMV terminal itself.