EMV Compliance

The world of credit card processing in the United States is finally catching up with the rest of the world in the way of adopting EMV compliance, both for the issuers and processors. As business owners, It is very likely you have heard terms like "EMV," "compliance," and "liability shift," repeatedly mentioned as being at the center of these changes in the merchant services industry and if you haven't, well we are glad you are reading this article. Our team at SlashMyFees would like to answer some of your most crucial questions about EMV, how it will affect your business, and how you can make sure your company and customers are protected and prepared for these changes.

What is EMV?

The most obvious place to start our discussion is by explaining the simple term at the focus of these discussions and changes: EMV. "EMV" is an acronym that stands for "Europay, MasterCard, and Visa." These three companies developed this technology to combat credit card fraud. Physically the technology comes in the form of embedded microchips on the cards. Since traditional credit cards have static data, they are easy to clone, with an embedded chip card issuers can make their cards harder to replicate. The EMV chip cards are significantly more secure because they use a new encryption for every sale. The EMV chip cards are already being issued by American Express, Bank of America, Citibank, JPMorgan Chase, U.S. Bank, Wells Fargo, as well as some credit unions.

This new technology also brings some changes to the transaction experience, because of how the EMV-chip cards need to be used in conjunction with the EMV-capable point-of-sale equipment. Chip cards are inserted, or "dipped," into the reader and left in place for the entire transaction as the card and reader communicate back and forth.

While EMV technology has been standard operation in most major markets globally for many years, its adoption in the US is relatively recent. The delay to adapt this new, more secure technology, has resulted in a disproportionate occurrence of credit card fraud in the United States - Although the U.S. is responsible for only 24% of all credit card sales, it is also responsible for nearly 50% of fraud worldwide. The U.S. has had the most credit card fraud in the world over the last five years, with the card fraud losses increasing to more than $5 billion in one year.

EMV Compliance and the "Liability Shift"

Many businesses owners have been asking the question: "How does the EMV technology affect my business?" To understand how the EMV chip cards and EMV-capable point of sale systems will impact your business, you must understand the changes that are being made to the industry as a result of this new technology.

To drive a nationwide transition to EMV technology, the credit card companies, and banks set individual mandates. The major mandate, which went into effect as of October 2015, requires EMV-capable point-of-sale equipment to be used by nearly all merchants. The most notable exceptions being Pay-at-the-pump gas stations, which have until October of 2017 to upgrade; as well as ATM operators, for whom Visa has set a deadline of October 2017 to upgrade to EMV-capable machines.

If your business is not EMV compliant, (conforming to the mandate as described), you will be affected by the "liability shift," which makes merchants responsible for fraudulent transactions if they have failed to comply with the new industry regulation. In other words, U.S. merchants who do not make their businesses EMV compliant by utilizing EMV-capable terminals are putting themselves at risk of loss because they are now responsible for the costs associated with fraudulent transactions they may accept.

It is worth noting that in addition to the losses that can come from the liability shift, not having the EMV compliant equipment that allows you to accept chip cards may also cost your business lost revenue. Processors may choose to add an EMV non-compliance fee for enterprises that don't upgrade to EMV capable terminals.

The good news is that, as of October 2015, it costs the same to accept EMV chip cards and traditional magnetic stripe cards. Since EMV chip cards are being rolled out to most consumers in stages, some consumers still do not yet have chip cards. Fortunately, EMV-capable point of sale terminals still provide options for accepting magnetic stripe credit cards so businesses can process both types of cards.

How do I make sure my business is EMV compliant?

If you want to make sure you are not only EMV compliant but also that you are getting the best rates for your credit card processing and point of sale needs click here. Our team wants to help you understand EMV, keep your customers and your business protected, and make sure you never waste time & money on these essential parts of your business.

The Simplest Explanation of EMV compliance and its Effect on Your Business:

EMV refers to the technology in the chips on newer credit cards, which allows for more secure transactions. As of October 2015, if you are not "EMV compliant," (i.e. if you do not have EMV-capable POS equipment), then your business is liable for the costs associated with fraudulent transactions you accept. Click here to make sure your business is ready for EMV, and that you are not overpaying for that service!