EMV- are you ready?
EMV stands for Europay, MasterCard and Visa and is a global standard for credit cards with chips used to authenticate transactions. Many of us have already received chip and pin credit cards from card issuers.
In October 2015, merchants will be subjected to new EMV standards, a transition away from traditional magnetic-stripe credit cards to these chip-and-pin cards. This reflects a welcome shift for business owners and consumers alike.
In the wake of several large scale credit card data breaches at major retailers in the US, merchants and consumers are looking for greater protection against fraud – and EMV delivers this.
Here’s some frequently asked questions relating to merchants and EMV.
1. How are EMV cards more secure?
The magnetic stripes on traditional credit cards contain all the data necessary to make a purchase. Whoever accesses that data has the information necessary to make purchases which makes these cards a prime target for fraud.
Every time an EMV card is used for payment, the card chip creates a unique transaction code that can be used only once making them more secure.
2. How do my customers use an EMV card to make a purchase?
Instead of using the traditional swipe method, customers will ‘dip’ their cards in the card reader terminal where the card chip will initiate the unique transaction data transmission.
Some EMV cards also support contactless card reading where the card can be tapped against a terminal scanner to initiate the transaction.
3. If fraud occurs after October 1 2015, who will be liable for the costs?
Currently, if an in-store transaction is conducted using a stolen card, liability falls on the payment processor or issuing bank.
After Oct. 1, 2015, this liability will lie with whoever is the least EMV-compliant party in the fraudulent transaction. So if a business owner has not changed its system to accept EMV cards, it runs the risk of high liability costs if there is a data breach.