You’ve likely heard bits and pieces about EMV or Chip-and-Pin. The problem is there is a lot of inaccurate information out there and if you’re like most of our business clients you don’t have the time to dig in and get all the facts… Not to worry we’ve compiled the facts for you.
1. What is EMV?
EMV — which stands for Europay, MasterCard and Visa — is a global standard for cards equipped with computer chips and the technology used to authenticate chip-card transactions.
2. How is a chip card different from a traditional payment card? A chip payment card looks just like a traditional card with an embedded chip in addition to the standard magnetic stripe on the back of the card. What you see on the card is not the actual microchip but a protective overlay. The microchip provides an additional level of authenticity for the transaction.
3. What do I do when a customer presents a chip card?
Chip cards will still have a magnetic stripe during the U.S. migration to EMV to ensure that customers can continue to pay until all merchants have been given the time to upgrade their equipment.
4. How does EMV chip technology work?
Your EMV-enabled device will communicate with the chip inside the customer’s smart card to determine whether or not the card is authentic. Generally, the terminal will prompt the customer to sign or enter a PIN to validate their identity. This process enhances the authentication of both the card and cardholder, effectively reducing the possibility that your business will accept a counterfeit card or be held liable for a fraud-related chargeback.
It also provides a unique tokenized encryption, meaning that the information that is communicated at the point of sale will only be valid for that individual transaction; this will greatly decrease the risk of compromised cardholder information.
5. Will I still be able to accept traditional credit and debit cards?
Chip cards will still have a magnetic stripe during the U.S. migration to EMV, to ensure that customers can continue to pay until all merchants have been given the time to upgrade their equipment. So you can continue to accept payment cards that are not chip-enabled until October 2015, at that time the liability regarding magnetic strip transactions will shift to the merchant.
6. How will chip cards impact the checkout experience at my business?
To process a chip card transaction, follow these four simple steps:
- Identify whether the card is a chip card.
- If it’s a chip card, the customer should then insert it into the chip card reader (slot on the bottom-front of the terminal) and leave it there until the transaction is complete.
- Follow the prompts displayed on the terminal.
- Let the customer complete the transaction by keying in a PIN or signing the receipt. The issuing bank will determine if the customer needs to use a pin or sign the receipt.
7. What do I do if my customer is using their chip card for the first time?
Make sure the card is inserted into the terminal’s chip reader slot face up with the chip first. The card must stay in the terminal’s chip reader slot for the duration of the transaction, which ends when the receipt is being printed. If the card is removed before the end of a transaction, the payment will not be processed.
8. Am I required to support EMV?
No, you are not required to support EMV in the U.S. region at this time. However, one item that you need to consider is that even if your organization hasn’t been targeted by high levels of card present fraud in the past, you may be putting yourself at risk in the future, as fraud will migrate to the weakest technology (magnetic stripe) Therefore, you may want to ensure that all your terminals are chip capable and that your payment processing application can support chip card acceptance. The good news is that most terminals deployed in the last five years are already chip capable so you may be ready to accept these cards today.
October 2015 marks a liability shift. While it will not be mandated that merchants accept EMV transactions, the liability shift means that if there is a disputed transaction that was run using the magnetic strip the merchant is 100% responsible for returning funds to the cardholder regardless if the dispute is legitimate or not.