Merchants who have not made the investment in chip-enabled technology may be held financially liable for card-present fraud that could have been prevented with the use of a chip-enabled POS system.
What is EMV?
EMV chip technology is becoming the global standard for credit card and debit card payments. Named after its original developers (Europay, MasterCard® and Visa®), this smart chip technology features payment instruments (cards, mobile phones, etc.) with embedded microprocessor chips that store and protect cardholder data. This standard has many names worldwide and may also be referred to as: "chip and PIN" or "chip and signature."
What is chip technology?
Chip technology is an evolution in our payment system that will help increase security, reduce fraud and enable the use of future value-added applications. Chip cards are standard bankcards that are embedded with a micro computer chip. Some may require a PIN instead of a signature to complete the transaction process. Chip technology may also be referred to as: "chip and PIN" or "chip and signature or EMV chip technology.
What makes EMV different than the traditional magnetic stripe card payment?
Simply put, EMV (also referred to as chip-and-PIN, chip-and-signature, chip-and-choice, or generally as chip technology) is the most recent advancement in a global initiative to combat fraud and protect sensitive payment data in the card-present environment. A cardholder's confidential data is more secure on a chip-enabled payment card than on a magnetic stripe (magstripe) card, as the former supports dynamic authentication, while the latter does not (the data is static). Consequently, data from a traditional magstripe card can be easily copied (skimmed) with a simple and inexpensive card reading device – enabling criminals to reproduce counterfeit cards for use in both the retail and the CNP environment. Chip (EMV) technology is effective in combating counterfeit fraud with its dynamic authentication capabilities (dynamic values existing within the chip itself that, when verified by the point-of-sale device, ensure the authenticity of the card).
Why should I invest in chip card acceptance now?
Preventing the growth of fraudulent activity is one of the main reasons the industry is moving toward EMV technology. Chip cards make it difficult for fraud organizations to target cardholders and businesses alike. As a result, more and more chip cards are being introduced by U.S. financial institutions in order to support and switch over to this technology.
EMV for Small Business
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.
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.
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.
Will I still be able to accept traditional credit and debit cards?
The Future Proof terminal has a magnetic stripe swipe reader and you can continue to accept payment cards that are not chip-enabled.
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.
How will chip cards impact the checkout experience at my business?
To process a chip card transaction, follow these four simple steps:
1 Identify whether the card is a chip card.
2 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.
3 Follow the prompts displayed on the terminal.
Let the customer complete the transaction by keying in a PIN or signing the receipt.
EMV, also known as “Chip Cards“, “Smart Cards”, or sometimes “Chip and PIN” is a series of specifications that define a more secure method of payment. It was developed jointly by Europay, MasterCard and Visa in the mid-1990s.
Most of the world has either migrated to EMV or is in the process. Many have questioned if and when the U.S. would move to EMV.
U.S. financial institutions started issuing EMV chip cards to their frequently traveling customers. But when both U.S. neighbors, Canada and Mexico, deployed EMV in response to mandates from the card brands, U.S. cross-border counterfeit fraud spiked. The U.S. is one of the last countries to adopt EMV and global fraudsters know it.
How it works
EMV introduces a small computer or "chip" to every payments device. This chip stores information, performs processing, and contains secure keys which help to generate the cryptographic data. The most important feature of EMV is dynamic data generated with each transaction. This dynamic data makes it nearly impossible to create counterfeit cards, or replay intercepted transactions.
EMV card chip
Benefits of EMV
EMV is designed to protect against counterfeit fraud through authentication of dynamic data generated by chip cards, smart phones, and other EMV-compliant devices. EMV also provides risk management parameters at the card level, and when used with PIN, can offer protection against lost and stolen fraud.
EMV point-of-purchase technology works hand-in-hand with other products and services like Dynamic Currency Conversion, Point-to-Point encryption and PIN based debit and opens the door to implementing new features like contactless and mobile payments in which consumers have expressed interest.
Count on us
GlobalPay Payments continues to lead the industry in its mission to be the most trusted EMV processor.
The impact of EMV adoption to the entire payments infrastructure will be significant. From terminals to ATMs, and from card issuers to merchants, the time to start planning is now.
Contact us today to learn more about getting an EMV-enabled terminal, or integrating your POS software to enable EMV.