What is the deal with EMV Credit Card Processing?

Guest post by Ben Ford of American Payment Solutions, a locally owned and operated merchant processing company.

You’ve probably heard talk of EMV with increasing regularity over the past several months. This new regulation seems to be creating a sizable knot in the stomachs of most business owners. It’s doubly scary because it is being advertised as the key to credit card security. With breaking news of new credit card data breaches every time we turn around, and deadlines for implementation of EMV set for 2015, it’s understandable that EMV is the topic everyone both does and doesn’t want to talk about.

Below, APS has taken a few minutes to outline what the new securities mean to you and your company.

What is EMV?

• EMV stands for EuroPay, MasterCard® and Visa® and is also known as “chip cards” or “smart cards”.
• EMV cards have been used since 1994 in Europe and around the world. They are more secure than the magnetic swipe cards we use currently in the U.S.
• The new EMV cards have a microchip. When the card is inserted, this generates a unique sales code. The sales code is a unique, one time use code that adds to the security of using the new cards.
• Both Visa® and Mastercard® have set a deadline for making the change to EMV credit card processing for October 2015.

 

What does this mean for my business?

• Starting October 2015, businesses will be responsible for fraud losses that occur as a result of a cardholder having to pay using a magnetic strip instead of a smart card due to a business not having a smartcard-capable device.
• To avoid this liability issue, businesses will need to get EMV ready point of sale equipment.

 

What are the benefits of the EMV transition?

• Security- As opposed to magnetic stripe technology, a chip is extremely difficult to crack; card authentication and PIN verification are performed automatically by the chip.
• Streamline- The checkout process at the POS, cash handling in general and the cashier’s after-hours balancing procedures will be streamlined.
• Simplify- The handling of fraud, in particular the retrieval of payments records while dealing with chargeback requests will be made simpler.
• Fraud Prevention- Each transaction carries a unique ‘stamp’ which prevents the transaction data from being fraudulently reused, even if it is stolen from a merchant’s records.

 

Will I still be able to accept traditional credit and debit cards?

Yes, credit card terminals will still have a magnetic stripe swipe reader and you can continue to accept payment cards that are not chip-enabled. Chip cards will also have a magnetic stripe during the U.S. migration to EMV, to ensure that customers can continue to pay until all merchants have been given the time to upgrade their equipment.

What should I do to prepare for the EMV transition?

• Training and product awareness for your employees is imperative so that everyone is familiar with the new requirements to make the customer experience as smooth as possible.
• Don’t wait to make the switch. Businesses that wait to move to EMV may lose sales or customers who prefer to swipe their new chip cards.
• Start researching your equipment options. You may need to invest in new POS terminals and/or mobile swipers that are compatible with EMV cards.

If you have any further questions concerning your merchant processing, please contact our office for an appropriate referral.