Europay, MasterCard, and Visa – EMV

What is EMV?

EMV credit cards are the coming gold standard for credit card companies. The acronym E.M.V refers to three companies: Europay, MasterCard, and Visa. Cards with EMV chips look slightly different than other cards due to one slight, yet major difference. The difference being the amount of layered security capable of being added to the Credit Card’s integrated chip. With the addition of the EMV chip, the need for improved credit card payment terminals has become a major issue. By October of 2015, full integration of EMV for all credit card payment terminals will become the standard for all businesses.

Unfortunately, awareness of EMV technology is dangerously low among small businesses. It’s safe to say, the United States is a very long way from having complete EMV compliance by the deadline. Failure to comply with this deadline will result in a major liability shift for businesses and the way fraudulent transactions are addressed.

According to a recent article by Digital Transactions News, “Those expecting that the U.S. payment infrastructure will have largely adopted EMV cards by the end of next year will be sorely disappointed… While more than half of merchant locations will be EMV-ready by the liability-shift date, no more than a quarter of stores with fewer than 20 employees will be.”

The Need for EMV Compliance.

No one wants to have to pay the bill for charges made by criminals using counterfeit information or stolen cards. What happens most of the time is that the credit card company issuing the card takes a hit for the fraudulent charge. Consumers sure don’t want to pay the bill, especially if it wasn’t them. So who really pays?

The EMV strategy stipulates giving the international community time to get equipped with the appropriate equipment to handle transactions with cards using the EMV chip. Many standard card terminals used by small and medium businesses alike will not be able to facilitate the higher-end security features of the cards with EMV. These old card terminals will still be able to process transactions with these cards, however, through the magnetic strips on the card.

The new chip and PIN security feature makes it difficult if not impossible to forge a card or steal its data as the information is encrypted on an EMV chip and a PIN is also required. If any criminally-minded individuals attempt to counterfeit one of these cards and use it at a location equipped with one of the new EMV compliant card terminals, the transaction will be declined.

After the stipulated time-table of the EMV expires, there will be stricter standards holding merchants that do not use EMV compliant card terminals to approve transactions liable for fraudulent charges. The credit card companies investigate any allegation of fraud. Once the crime has occurred, whose job will it be to pay the money from the transaction, especially if the culprit gets away? After the deadline, if you are not equipped with an EMV Compliant payment terminal, it could be you.

When Exactly Are The Deadlines?

  • By October of 2015, EMV Expects Full integration (Excluding gas stations)
  • By October of 2017, EMV Expects Full integration (Including gas stations)

Why the Rush for EMV?

Much of this scenario originates in Europe. Europay ran a bunch of studies and discovered exactly how successful this strategy is. By taking advantage of a PIN number-based approval method of card payment, there was a drastic reduction in card fraud cases being reported. The rush to get these terminals in place to help the global war on credit card fraud shifts its sights on the United States to get on board. As a merchant you need to take the time to investigate whether or not your credit card terminal is EMV capable. If not, you should be prepared for the coming shift in liability for credit fraud before it’s too late.