What are EMV Cards and Who Needs to Use Them?

EMV technology features credit and debit cards embedded with microprocessor chips that store and protect cardholder data. It is fast becoming the global standard for all card payments, and is also beginning to include mobile phone payments apps that will become commonplace in the near future. EMV stands for the original developers Europay, MasterCard and Visa.

Microprocessor chips increase security and minimize fraud, offering greater protection to cardholders and merchants. Most banks are well on their way in the process of re-issuing magnetic strip credit cards with microchip-enabled cards.

The reason you need to make the switch to EMV cards is because it is the direction in which card payment technology is evolving and it will become the norm in time to come.

This is how EMV works

Chip-enabled cards are standard bank issued cards that are embedded with a micro computer chip. The cards generally do not look much different, but the behind the scenes technology is where all the difference lies.

EMV is a global initiative to beat fraud and protect the sensitive payment data transmitted with every credit or debit card payment. A chip-enabled credit or debit card secures data much more aggressively than what a magnetic strip credit or debit card can.  Chip-enabled cards support dynamic authentication, while magnetic strip cards have static data that can easily be copied by skimming the information with a simple card-reading device.

If the from the magnetic strip of a card without an EMV chip has been skimmed, the card can be reproduced and transferred to counterfeit cards without raising any red-flags with merchants. EMV technology prevents counterfeit fraud with dynamic values existing within each individual chip that is verified by the point-of-sale device when payment is made, ensuring that the card is authentic.

EMV will also put cash in merchant’s pockets that can be kept or passed on to customers

By preventing fraud and the related charge-backs to merchants, EMV acceptance will bring additional cost savings. Most payment brands are encouraging the change to chip-enabled cards by ensuring that chip-enabled card holders can pay at chip-enabled card readers. One of these initiatives has been introduced by American Express, Discover, MasterCard and Visa who have issued upcoming rules and guideline encouraging processors and merchants to implement EMV chip technology. The crux is that they have introduced programs that waive a merchant’s annual PCI-DSS if 75% of the respective payment brand-specific transactions are processed through a dual contact and contactless EMV certified device.

On the negative side, American Express, Discover, MasterCard and Visa have introduced upcoming liability shifts for fraudulent card transactions. Any merchant or processor that does not support EMV chip technology may be liable for the cost of counterfeit fraud. Liability shift policy refers to the change in who bears the chargeback cost of fraudulent transactions.

Want to learn more?

For more information about EMV cards, or to sign up for a merchant account today, just call 1-888-924-2743 or visit Charge.com.

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