EMV® Chip Card Technology
Preparing for EMV® Chip Cards in the U.S.
What every business needs to know about the future of credit card acceptance
EMV® (Europay®, Mastercard® and Visa®) is a global standard for the authentication of chip-based credit cards. Chip cards, also known as “smart cards,” are credit cards that have sensitive cardholder information embedded in a data chip in the card, as opposed to traditional credit cards where the data is stored in the magstripe on the back of the card.
While the two types of cards may look the same, the way that the data is accessed to process a payment transaction is very different. Traditional credit cards are swiped through a magstripe reader, or credit card terminal in order to perform a transaction. Chip cards can be swiped too, but have extra security advantages when processed via EMV chip readers instead.
That’s where the impending liability shift comes into play.
The Liability Shift
On October 1, 2015, merchants who do not use a chip card reader to process card-present transactions when a chip card is presented, can be held liable for any fraud that occurs as a result. In other words, after the liability shift takes effect, merchants who swipe chip cards instead of using EMV chip readers do so at their own risk.
You may be thinking, “But my customers don’t use chip cards, so why should I care?” The answer is simple. A wave is coming. The credit card industry has been paving the way for EMV to become the standard in credit card processing for several years. EMV Aite Group® predicts that about 70 percent of cards in the U.S. will have EMV chips by the end of 2015.⊃1;
EMV technology increases card data security mainly by making it virtually impossible to create counterfeit cards, and by requiring cardholder authentication that verifies that the card belongs to the person using it.
EMV technology has dramatically reduced card fraud resulting from counterfeit, lost and stolen cards in other countries where it is employed, but the U.S. is one of the last major countries to adopt it. The UK Cards Association reports that losses at U.K. retailers has fallen by 67 percent since 2004, and lost and stolen card fraud fell by 58 percent between 2004 and 2009.⊃2;
A reduction in card-present fraud in other countries doesn’t mean that fraud is no longer a lucrative activity for cyberthieves. Instead, it means that fraudsters’ strategies and their targets have shifted in response. Card not present fraud (ecommerce, and mail/telephone order) and ATM fraud have increased. And a huge wave of fraud has been directed toward the U.S. where EMV hasn’t been fully implemented.
According to EMVCo®, as of December 2013, 99.9 percent of terminals in Europe are chip-enabled, 84.7 percent of terminals in Canada, Latin America, and the Caribbean are also chip enabled.⊃3; Add in the other eighty countries that currently have, or are in the process of migrating to EMV, and the U.S.’s vulnerability becomes clear.
If you want to avoid the fraud liability after October 2015, you’ll need to implement an EMV capable card reader that can interface properly with your POS system. If your POS system is incompatible with EMV technology, and can’t be updated, you may need to upgrade your system. Because there are also interface and integration considerations adding EMV acceptance is best done in partnership with your POS provider.
Vantiv Integrated Payments works with POS system developers, value-added resellers, and merchants to help businesses achieve EMV compliance. Contact us, or your reseller today to get started.
EMV: Lessons Learned and the U.S. Outlook, Aite Group, June 10, 2014 2. New Card and Banking Fraud Figures, UK Cards Association, March 2010. 3. EMVCo, http://www.emvco.com/about_emvco.aspx?id=202, December 2013. Visa, MasterCard, American Express, EMV, Europay, UK Cards Association, and Aite Group are registered marks belonging to one or more unaffiliated third parties that do not endorse or sponsor Vantiv Integrated Payments, LLC.
- More Secure Ways To Pay
- Small merchants use tokenization
- What merchants should know
- Merchant cash advance for small business
- What is a merchant cash advance
- Bridging the Gap Part 1: New Customer Expectations
- Bridging The Gap Part 2: Merchant's current reality
- Bridging The Gap Part 3: Digital Commerce
- Breach Report
- Safe and Sound: 4 Tips to Secure Your Business
- Securing the Customer Experience
- Top Five Payment Technologies You Should Not Ignore
- Ways Merchant Can Hurdle Mobility POS Adoption Challenges
- The Time is Now to Develop a Mobile App
- Reasons Consumers Shop Online
- PCI for Retailers
- Loyalty and Payments
- E2E and Tokenization For Your Business
- Avoiding Fraud on your ecommerce site
- The Top 3 Data Breaches of 2014
- Today's Emerging Payments Trends
- EMV: What You Need To Know
- Learn What's New With PCI 3.0
- Integrated Payments and Security
- The Four Levels of PCI Compliance
- PCI Compliance For Restaurants
- POS Security Best Practices
- What does it take to be PCI compliant?
- Beyond cuisine
- What is PCI Compliance
- Article-More repeat business for your restaurant
- Protect Customer Data at the POS
At Your Fingertips
The impending shift in liability for card-present fraud is driving a transition to EMV. Are you ready? This handbook can help you prepare.
Vantiv Integrated Payments is ready for EMV and has the technology and a network of providers that merchants need to enter the new era of payments.