By now you’ve surely heard that chip and PIN credit cards have come to the U.S. in full force. We’re about 10 years behind the rest of the world in terms of EMV migration, but starting in 2015, merchants of all types began the shift to accepting EMV credit and debit cards.
 
The reason that EMV technology has now been adopted in the U.S. is that, with the European adoption of this payments technology a number of years ago, payment fraud volume began to shift from Europe to the U.S. where cards have been easier to replicate or use fraudulently. It’s critical that you upgrade your systems to support EMV cards so that your business doesn’t become a target for fraud. And if that’s not incentive enough, effective October 1, 2015 the so-called fraud liability shift associated with EMV began. That shift essentially places the burden and financial responsibility of fraud at the point-of-sale on the weakest link in securing the transaction. That means, if you’re not using EMV certified terminals fraud chargebacks could be coming your way in bigger volumes than in the past. Read on to brush up on your EMV card knowledge.
 
How EMV chip cards are different from magnetic stripe cards
An EMV chip credit or debit card is the same size as a traditional magnetic stripe card. However, the power of EMV lies in the fact that each EMV card is equipped with an embedded computer chip that generates unique data for each transaction when that card is dipped into the terminal. Even if a fraudster intercepts the data and steals the transaction information, it cannot be successfully used to make subsequent transactions because the EMV data is one-time-use-only. What’s more, the chip card data is useless without the PIN to complete the transaction. So even if the chip card information is stolen, the fraudster would also have to know the PIN to complete a transaction. For security, the PIN can be changed on-demand by the cardholder.
 
A key way that EMV chip card technology impacts merchants is the liability shift for certain types of fraud. If your locations have not upgraded to EMV-enabled terminals and your business is hit with certain types of fraud, you—not the issuing bank—will now be liable for those charges. In the past, financial institutions usually had to “eat” the enormous expenses of fraud but with EMV, merchants who are not prepared for this technology will have to share in that burden or bear it entirely.
 
How customers use EMV chip cards at your store
Once your stores have made the upgrade to EMV-enabled terminals, you’ll need to make sure your staff has been fully trained on how EMV transactions work so they can assist customers and make EMV payments as seamless as possible. To make a purchase with a chip and PIN card, the customer inserts the card into a slot in the payment machines—also known as “dipping”—then enters a PIN while the card stays in the slot. Instead of having to sign a POS device or paper receipt, the correct PIN authorizes the transaction. The POS terminal should instruct the customer to leave the card in the slot until the transaction is completed.
 
How EMV chip cards are more secure than magnetic stripe cards
Requiring the customer to enter a PIN means that your sales associates will not have to handle the card. Your staff simply hands the customer the POS device and the customer inserts the card and verifies payment. The fact that the card never leaves the customer’s hand can help to prevent data breaches caused by employee data theft.
 
Adopt EMV technology today to protect your systems tomorrow
As the payment processing industry continually develops new ways to protect businesses, customers and their data, fraudsters are merely steps behind in looking for sneaky new ways to steal that data and, ultimately, money. Chip cards provide an additional layer of security for consumers and merchants alike.
 
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