What is EMV?
EMV is a method of accepting payments the involves a chip in the card presented at the time of purchase. It was created by Europay, MasterCard, and Visa (EMV) in response to vulnerabilities identified in Europe’s payment system. EMV has recently been mandated as required for all issuers in the US in 2013, and all merchants in 2015.
Merchants need to be able to accept an EMV card at the POS in 2015 or accept 100% liability for the transaction. That means if its fraud, disputed, or charged back the merchant is liable for the cost.
The big gain with EMV is security. The chip in the cards is much harder to duplicate than the current swipe band on a card. When a card number is stolen it will be much harder to make a copy of the card to use for fraud. Devices like skimmers will not work to steal card information. Countries who have adopted EMV have seen up to an 80% drop in fraud.
EMV is similar to current card processing in that a card present situation the customer hands the merchant the card. The merchant will put the card into the machine to allow it to read the chip in the card. Once the card is authorized the merchant will prompt the customer to verify themselves either by signature (as they do now) or by entering a PIN.
The exact details of how EMV will be rolled out to businesses and customers are still unclear as Visa and MasterCard decide the technical details of how the card authorization and transaction settling will take place on the back end.
What does EMV mean for your business today?
First, don’t buy a stand alone terminal without an EMV reader. An EMV reader is typically a horizontal slot found under the card reader. If you’re not sure ask.
If you are purchasing a full POS solution be sure to ask what their EMV plan is. Many vendors will require pricey upgrades to systems. You want to be aware of any additional components you need that will set you back a few grand.
For online transactions there will be new information to acquire from the customer to process. Be ready to add these to your website as EMV rolls out.
Second, train your staff. If a card has an EMV chip in it, use it! All cards will have both a chip and magnetic strip on them and either will work. Employees need to understand what the chip is, where it goes, and what the expected response from the POS is. If the strip is used, none of the benefits will be realized and your business will be liabile for the transaction.
Last, be ready for the next step. EMV may lead payments directly into NFC (Near Field Communication). Upgrading to EMV will be important and is a necessary step, but don’t be fooled into thinking this will last like magnetic stripes did. Be ready to upgrade to NFC in the next few years. EMV / NFC hybrid POS systems are already being produced and tested. Adoption in the US is a little down the road, but is a definate possibility.
Make sure you take the time to talk to your processor about these changes to the industry. Failure to comply will initially shift 100% of liabilty to your business. After cards completely shift to 100% EMV you may not be able to accept payments.
If you would like to learn more about EMV, Contact Us. We are happy to answer any questions you have.
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