EMV and the October 2015 Liability Shift – Are You Ready?

By Zach Maciosek, Sales Representative at Elite Payment Systems

dec 2014 Zach snapshotWhat is EMV?
EMV, or Europay MasterCard Visa, is a fraud-reducing technology that can help protect issuers, merchants and consumers against losses from the use of counterfeit and lost or stolen payment cards at the point-of-sale.

Imbedded Chip Layers of secure technology – Virtually impossible to counterfeit
An EMV chip card is a plastic payment card with a microchip that is virtually impossible to duplicate because every single purchase is assigned its own encrypted transaction data when the card is inserted into the device.

Alternatively, when the magnetic stripe of a card is swiped through the device, data from the magnetic stripe is captured and included in the transaction request, and the same exact data is used for every purchase, making information easier to duplicate and steal.

Why is the October 2015 date important?
October 2015 is a key date because liability for counterfeit transactions will move to the weakest link in the transaction.

This is a Liability Shift – not a mandate
New card association policies will result in a liability shift in from issuers to acquirers (and ultimately merchants).

If a consumer uses a card with a magnetic stripe for a fraudulent transaction on a terminal that cannot process EMV, the liability for the fraud will rest with the merchant due to failure of the merchant to offer EMV acceptance.

What type of Equipment is needed?
In order to accommodate new EMV-enabled cards, merchants need to have EMV-ready terminals or point of sale systems.

How the transaction works?
A customer will insert their EMV card into the bottom slot of a terminal. The card remains in the terminal for the duration of the transaction. The chip validates the transaction authorization data and the transaction amount.

  • Chip & Pin – Currently is not required – but as the technology is utilized more throughout the US, it may be required in the future

Advantages of upgrading
For merchants that don’t have EMV-capable equipment, purchasing new or upgrading existing terminals or POS systems will not be costly.

There are many options today that are EMV-ready and also include Near Field Communication technology that can be used for Apple Pay.

If needed, upgrading to new equipment now will position your business well for this fall and into next year nearing the EMV deadline. It will also be much less expensive than the cost of liability in the event of fraud.

NFC Technology
EMV cards can also support contactless card reading, also known as near field communication (NFC). Instead of inserting an EMV card, NFC-equipped cards are tapped against a terminal scanner that can pick up the card data from the embedded computer chip. This method allows for a faster checkout process.

Most EMV-capable terminals and POS systems will also be enabled to accept contactless and mobile payments (like Apple Pay), providing more convenience and payment options for customers and faster checkout times.


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