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What is EMV?: All the Questions About Accepting Chip Cards You Never Thought to Ask

Brant Schelhaas

By now some of your customers have come through your door holding a relatively new credit card in hand that features a metallic-looking chip in it. With all the daily work required to run a business, maybe you forgot about these types of credit and debit cards. After all, you can still swipe cards with ease. So what exactly are these new payment cards called and what do you need to know before accepting them?

Let's take a look at all the questions you have about these new cards but haven't asked:

What is EMV and what does it mean?

Short for Europay, MasterCard and Visa (EMV), the credit card issuers that developed the technology, EMV cards store the cardholder's information on a computer chip rather than a magnetic stripe.

While it's a new technology for U.S. customers and businesses, Europe adopted chip-and-PIN cards years ago to combat fraud, U.S. News and World Report noted.1

Is there more than one type of EMV card?

There are two types of EMV cards - one long used in European countries where the shopper uses his or her chip-and-PIN number to make a purchase and the other that requires a chip and signature to complete the transaction.

Merchants in the U.S. will mostly accept chip-and-signature cards, as they're more common in America.

Why should I accept them?

Many businesses are still slow to accept chip cards, mainly because they haven't purchased or activated a chip reader. If you still need an EMV card reader for your point of sale system, do so as soon as possible. Effective October 1, 2015, a liability shift took effect for U.S. transactions. nder that shift liability for fraudulent purchases moves away from issuers, who've traditionally been liable, and to the weakest link in the EMV chain, so to speak. Lack of EMV acceptance readiness creates a weak link for merchants, and makes them more susceptible to liability for fraudulent card acceptance and purchases, according to USA Today.2

What makes EMV safer?

Storing financial data on a computer chip that is embedded in the card is much safer than the magnetic stripe on the back of the card. Thieves use card skimmers and other tricks to duplicate the information on the stripe to commit fraud. Since the data on a magnetic stripe never changes, fraudsters can copy it multiple times. However, an EMV chip is much harder to reproduce. If the card is stolen at a particular point of sale, it won't work for any new transactions because the EMV's transaction number cannot be copied, CreditCards.com noted.3

Can I still accept cards with magnetic stripes?

The short answer to this question is yes. Many debit and credit cards that have EMV chips also feature a magnetic stripe on the back. As a merchant, you will still be liable for any fraudulent payments if you swipe the magnetic stripe of the card. However, if you use EMV chip card technology to process the transaction, the bank or card issuer is on the hook for any counterfeit payments made.

If you don't swipe it, how do you enter an EMV card?

Have your customers insert the chip end of their cards into your credit card reader. This type of card takes a few seconds longer to read, so the patron will leave his or her card in the slot until the device prompts them to remove it.

  1. http://money.usnews.com/money/blogs/my-money/2015/09/28/6-things-you-need-to-know-about-the-new-chip-cards
  2. http://www.usatoday.com/story/money/business/2015/10/01/chip-credit-debit-card-readers-october-1/73140516/
  3. http://www.creditcards.com/credit-card-news/emv-faq-chip-cards-answers-1264.php

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