EMV (Europay, MasterCard and Visa), is a global standard for credit and debit card processing designed to replace traditional magnetic stripe cards with cards that include a microchip.
The U.S. deadline for implementing EMV was October 1, 2015. Then, liability for fraudulent transactions has now shifted to those who haven’t upgraded to a compliant solution.
EMV is also referred to as chip and PIN or chip and signature. This smart chip technology consists of a microprocessor embedded into payment cards and smart devices such as mobile phones. The chip card looks like a regular credit card, but its microchip secures payment transactions at the point of sale. However, it requires you have an EMV compatible terminal.
Chip cards are more secure than regular cards because they offer better encryption. Card disputes will be reduced since the customer keeps their card in hand and security is improved because card data is passed directly to the payment processor.
EMV makes transactions simpler and quicker. Instead of swiping the card, it is inserted into, or tapped on the terminal.
EMV is part of a global payments infrastructure, so consumers with EMV chip payment cards can use their card on any EMV-compatible payment terminal around the world.
The consumer has to insert their card into the EMV-enabled terminal with the chip facing up. The chip card must remain in the terminal until the transaction is approved.
When the transaction is complete. the terminal will prompt the cardholder to take back their card. If a cardholder using a chip card swipes it, the terminal software may prompt them to use the EMV method instead.
To complete the purchase, the cardholder must enter a PIN or sign their receipt. Issuing banks in the U.S. will begin by providing their customers with chip and signature cards to ease the transition to EMV.
On the flip side, a chip and PIN authorization requires the cardholder to enter a four digit PIN (could be more digits), which must correspond to the chip embedded in their card.
A contact EMV transaction consists of the following steps:
A contactless EMV transaction consists of the following steps:
According to a recent study, U.S. credit card fraud is now a whopping 10 basis points, a 100% increase from just seven years ago, thanks to increasing fraud at the point of sale (POS). Criminals are targeting the U.S. because they are still relying on the less secure magnetic stripe.
Cardholder data is more secure on a chip-embedded card that utilizes dynamic authentication, than on a static mag-stripe card. With EMV, both the terminal and the card play important roles in the authentication process which is not the case when using magnetic stripe technology.
Chip technology is creating opportunity for innovation within the payments industry and consumers are already embracing new ways to pay. When merchants enable EMV on their payment terminal, customers are able to make purchases more simply and securely than before.
More U.S. banks are already issuing EMV cards to their customers. Merchants need to be prepared to accept these cards or risk losing business from shoppers who are concerned about security. Faster, more convenient transactions are on demand and merchants are under pressure to deliver!
Additionally, business owners with EMV-enabled POS devices reduce PCI scope and associated costs. It's just another incentive to adopt EMV today. EMVELOCITY is helping you gear up as we usher in this new era of payments security.
Merchants of any size are held liable for domestic and cross-border counterfeit fraud committed at the point of sale if they are not using a compliant EMV point-of-sale solution.
Merchants are liable for fraud that occurs on any chip card used on a magnetic swipe terminal. Card issuers will be liable for fraud that occurs when a chip enabled terminal is available but the consumer presents a magnetic stripe card for payment.
The statistics below show the percentage of card-present transactions that are EMV as of 2014. Figures represent statistics from American Express, Discover, JCB, MasterCard, UnionPay and Visa, as reported by their member institutions globally.
If your current payment terminal is not EMV-capable, you may be eligible for a free upgrade.
Simply complete the form below to see if you qualify.
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