What Does The October 1 Deadline Mean for Merchants?
Beginning October 1, if you swipe the magstripe on the back of a chip card and subsequently fraud occurs related to that transaction, you could be liable.
Each U.S. card brand announced a definitive, phased migration plan to accelerate the adoption of EMV chipcard standards in the U.S.
What Is It?
EMV, an acronym of Europay International, MasterCard and Visa, which in 1994 joined to provide a worldwide standard for the interaction between chip-based “smart cards” and approved payment devices. Widely adopted around the world, more than 40% of countries use EMV cards and over 70% use EMV payment devices. Until now, the U.S. has not followed this trend, preferring mag-stripe cards instead.
How Does It Work?
Credit cards with EMV capability, or smart cards, include an embedded microprocessor that provides robust security features and other applications not possible with traditional magnetic stripe cards.
EMV transactions utilize “dynamic digital data” in every transaction, resulting in extremely secure transactions with a reduced chance of fraud. Due to the benefits offered by EMV, this technology has become the standard in over 100 countries including Canada, Europe, Latin America and Asia.
In fact, according to EMVCo, approximately 44.7% of the total payment cards in circulation are EMV cards and 76.4% of the POS terminals installed globally accept EMV. The US is one of the last countries to implement EMV technology. However, Visa, MasterCard, American Express and Discover have all announced plans to move to an EMV-based payments infrastructure in the US by October 1, 2015. This means that the card brands will be migrating to this technology going forward and merchants will be required to accept EMV payments in order to remain compliant with Visa/MasterCard regulations.
What Are The Benefits For Merchants?
- Supports global interoperability (e.g., European travelers will be able to use their chip cards in the U.S. vice versa)
- Results in fewer chargebacks because EMV proves that a card was present
- Reduces fraud costs due to reduction in duplicate cards
- Shifts liability to the least secure entity
- Makes payment cards more diffi cult to counterfeit
- Improves dispute resolution
UNMATCHED PRODUCT LINES AND EXTRAORDINARY SECURITY
The complexity of migrating to EMV chip-card standards can pose significant challenges for merchants. CSA, through our partner Harbortouch, offers an unmatched line of EMV-compliant hardware and software to deliver complete solutions for meeting the U.S. migration plan. We’re also working to ensure that all payment applications designed to run on these devices will be EMV-capable. Most importantly, while EMV limits the exposure of merchant payment transactions to fraud and misuse, cardholder information is still transmitted in the clear during an EMV transaction. Verifone’s VeriShield Total Protect, Secured by RSA—the only solution of its kind—applies sophisticated end-to-end encryption and tokenization to secure cardholder information, from card insertion to processing and back.
We can provide the peace of mind of being equipped with everything needed to meet the U.S. migration plan deadlines and avoid potentially significant risks of fraud associated with solutions that are not EMV-compliant.
U.S. EMV Timeline
October 2015 Card present counterfeit card fraud liability shifts to the party that is delinquent on implementing EMV**.
October 2017 Liability shift takes effect for automated fuel dispenser (AFD) categorized merchants.
**Applies to merchant, acquirer, and/or issuer.
Contact CSA today to get your EMV compliant terminal!