We’ve been hearing about the EMV Chip Card for some time now, but the time has come and the EMV credit card and EMV credit card machine are here.
You are a merchant, so I know what you are thinking: How does this affect me and by business?
First off, EMV stands for “Europay, MasterCard, and Visa.” EMV was created to make a standardized protocol for “integrated circuit” cards, otherwise known as “chip.” These cards and the hardware that read them were an important piece of the puzzle in fighting against fraudulent transactions. The EU have been using EMV cards regularly since 2005, and Canada joined in 2012.
How Do EMV Credit Card Machines Work?
So, how does an EMV card and credit card machine work? A traditional magnetic-stripe card has an unchanging data code associated with it, making it easy to duplicate. A magnetic stripe card is also fairly inexpensive to recreate, thus making it an easy target for fraudulent activity and transactions. An EMV card has a “chip” on the card, payment data is read from this chip instead of the magnetic stripe. The way data is transmitted to the chip differs each time a transaction is processed, making it much harder to “skim” information from the card. Of course, the magnetic stripe is still included in the new chip cards, and can be used as a backup option if there is no EMV credit card machine processor available.
Except, there is a hitch to ‘back-up method’
New Regulations on EMV Secured Transactions
As of the October 1st, 2015 deadline, created by major U.S credit card issuers, the liability for card-present fraud has shifted to the merchants.
For example, if you process a credit card that is fraudulent without using the EMV credit card machine, you (the business owner) are responsible for the costs that follow any data breach.
The following timeline The Timeline for EMV Chip Card Liability Shift in the US:
- April 19, 2013 – Maestro shifted liability for international chip cards used in the US.
- October 1, 2015 – Visa, MasterCard, American Express and Discover liability shift for POS terminals.
- October 1, 2016 – MasterCard liability shift for ATMs.
- October 1, 2017 – Visa, MasterCard, American Express and Discover liability shift for pay-at-pump gas stations, as well as for Visa and AmEx at ATMs.
What EMV Means for Merchants – You Need an EMV Credit Card Machine
Due to the switch in liability many merchant service providers have encouraged their customers to make a switch and upgrade to an EMV credit card machine. Adapting to the change in payment processing helps protect businesses from a potential liability disaster. Sure, you may not lose any customers if you don’t upgrade your system, but you are losing peace of mind as the merchant. If you have an eCommerce only business, this change does not necessarily affect you, as the EMV cards and machines are for in-person transactions.