EMV Technology what is it?


Banks in the US are soon to be changing the inner workings of your customers’ credit cards. They’re going to add something new called EMV technology. What is this, then? It stands for “Europay, Mastercard, and Visa,” and when translated, that means credit cards will be fitted with a tiny computer chip that’s extremely difficult to counterfeit. If you’ve gotten a credit card recently, odds are it’s already got this technology built into it.

So why make this change? Aren’t credit cards working just fine the way they are? Here’s a statistic that might blow your mind: Just about half of credit card fraud worldwide currently happens in the US — despite just a quarter of worldwide credit card transactions happening in the US. Banks, of course, want to curtail this as soon as they can by moving away from magnetic-stripe-only cards. They’re much easier to counterfeit. Also adding motivation to the EMV movement were the recent security breaches at Neiman Marcus and Target stores.

And how will this affect your business, exactly?
For one thing, you’ll need a new type of processing device to read the information in the chip cards that wasn’t there before the changeover. This can get expensive, depending on how many pay stations you have. And when October 2015 comes, those businesses that do not have an EMV processing device online could be liable for chip card fraud, if they run an EMV card through a non-EMV reader.

What’s a hot topic in the financial press right about now? You guessed it — chip cards. There’s an awful lot of information out there. And it’s understandable that much of it can make small business owners’ hair stand up, since many of these discussions mention “liability” and “fraud.”

We’d like to give you all the crucial information about how the forthcoming changes will affect you. And you likely already have questions about all this EMV stuff. So to start, let’s go through the basics.

Will moving my business to EMV cost me some exorbitant amount? No. Many 3rd party companies, such as Square, are building EMV-compliant readers that are made to be both easy to use and very affordable, at the same time.

What’s “liability shift” all about?
Here’s the deal: Right now, if you run a forged card, the bank eats the costs involved. From October 2015 forward, if someone pays with a forged chip card, and you don’t have an EMV card reader to process that transaction, the bank will no longer be held liable. For example, if someone buys $20 worth of biscotti from a coffee shop with a counterfeit EMV card. If the coffee shop doesn’t have the right EMV reader to process that transaction, it can be held liable for the $20.

How new is this technology? 
It’s been in use for quite a while, actually. Including Europe, most of the world has been using EMV cards for years. The US is actually the last major market that’s still using cards with magnetic-stripe-only tech.

Will EMV cards be swiped in the same manner as magnetic-stripe cards? 
Not quite. They’ll need to be inserted into the EMV reader and left there for the whole transaction, as the card and reader talk to one another. Any of the new readers should be able to process both magnetic-stripe only and chip-enabled cards.

Will these 3rd party companies still offer their regular readers after October 2015?
You can still get present readers while the nationwide changeover to EMV technology is happening. Based on how long the rollouts have taken in other countries, the estimated time it’ll take for mass adoption in the US is about three to five years. Still, getting a device that’s enabled for EMV processing is a good thing to consider as soon as you can — the faster you’re set up properly, the sooner your business will be protected.

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