EMV’s effect on Point of Sale

EMV

Q:What is U.S. EMV?

A: EMV stands for EuroPay, MasterCard®, Visa®, the three entities that worked together to create worldwide standards for the chip card to ensure global interoperability. EMV is a payment method that combines a plastic card with integrated circuit chip (ICC). An EMV card uses the ICC to hold the account number and other sensitive data instead of using a magnetic stripe. The chip also contains logic for transaction processing and risk management.  EMV adoption in the rest of the world has been a gradual process that has taken years to decades to penetrate. The U.S. will need to modify many of its payment process to fit into the EMVmodel.

Q:Do I have to implement EMV?

A:While there is no mandate, merchants should consider the following to determine when or if they should implement EMV:

  • What is my current fraud chargeback liability, and does moving to EMV make sense in light of the potential impact to my business?
  • How will EMV impact my line speed?
  • What is the total cost of implementation?
  • How will my customers react if the technology isn’t in place and will they feel their transactions are secure?

Q:Why EMV now?

A: Presently,U.S. card fraud is above the world average, and continues to increase. EMV supports enhanced verification methods such as PIN and Signature verification.  In October 2015, there will be a fraud charge-back liability shift for merchants that choose not to implement EMV. In addition, starting in 2015,U.S. issuers will begin to issue more cards that will have EMV chips on them. In fact, the Payments Security Task Force predicts that 575 million U.S. EMV cards will be issued by the end of 2015.

Q:What is the October 2015 liability shift?

A: The liability shift will occur in October, 2015? the liability for fraudulent transactions will move from card issuers to merchants if an EMV card is presented for payment at the merchant and it is swiped or entered manually and the transaction is fraudulent. In this scenario the merchant would be liable for the fraud, not the issuer.

Q:Will cards still be issued with mag stripes, and will my existing equipment still work after the liability shift?

A: Cards will still be issued with mag stripe for the foreseeable future, but for how long is hard to state with certainty. As an example, EMV is over 5 years into its implementation in Canada and banks are still issuing cards with mag stripes.We are confident that the card brands and issuers will give the merchant community sufficient notice if they choose to stop issuing cards with mag stripe capabilities.

 

 

 

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