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December 4, 2014

What Your Business Should Know About EMV Cards

What’s all this talk about EMV?

What is EMV:

New regulations go into effect in the US over the next year as EMV cards become the standard format of credit and debit cards.  EMV (Europay, MasterCard and Visa) cards have an embedded microprocessor or memory chip (microchip) that contains all of the payment information needed to complete a transaction.

Why is the US adding EMV:

Reducing payment card fraud is the main motivation for the migration to EMV cards. Because of the recent high-profile data breaches at Target and Neiman Marcus, etc, banks have accelerated plans to implement technologies they say will prevent hackers from continuing to steal consumers’ account information.  Fraudulent purchases will become almost impossible to accomplish because it is extremely difficult to counterfeit the microchip inside and EMV card.

Currently, the majority of credit and debit cards in the US use magnetic strip technology, which exposes the information the card holds to any card scanner that asks. All thieves have to do is obtain that data and create a fake credit or debit card.

Unlike magnetic strip cards that store and transmit permanent cardholder information to a business’s point of sale device, the microchip in these cards encrypts transaction data differently for each purchase made. Essentially, it creates a one-time-use password that protects each transaction.

How this affects your business:

In an effort to encourage the transition, MasterCard, Discover, AmEx and Visa have instituted a policy that if a merchant that hasn’t adopted chip technology by October 2015, the merchant will bear the losses if a transaction turns out to be fraudulent. Merchants that have made the investment in EMVare protected from financial liability for card-present counterfeit fraud losses on this date. Thus if you’re a merchant that accepts swiped transitions we highly recommend you upgrade your credit card machine by October 2015 to avoid any unnecessary exposure.

The ROI (return on investment) on EMV-capable devices is substantial. These cards will offer significantly more security and confidentiality than traditional magnetic strip cards.  Anytime you lower the risk of fraud and chargebacks, you lower your costs of accepting credit/debit cards.

Chosen has a program designed to help offset some of the costs to upgrade your equipment. If you’re interested in taking advantage of this promotion and securing your business.

The benefits of an EMV-enabled system include:

  • Decreases fraudulent transactions and chargebacks.
  • Increases security and fraud protection to reduce some types of fraud liability and loss
  • Prevents the use of counterfeit, lost and stolen cards
  • Reduces skimming at the point of sale
  • Improves customer convenience and speed of transaction with PIN entry and contactless options
  • After-hours balancing procedures are streamlined and shortened
  • Eliminates some of the annual PCI validation requirements for certain merchants

EMV is coming, and Chosen Payments is ready and able to pave the way for a smooth transition. For more information, please contact your Account Executive or fill out the form below.

photo credit: Ciaran McGuiggan via photopin cc

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