EMV Explained for Small Business Owners
EMV smart cards are a hot topic in the US right now due to the data breaches that we have been seeing here. This blog is going to cover the history of EMV, what EMV stands for, and where it is going in the United States.
What is EMV?
The term EMV stands for Europay, MasterCard and Visa, who are the three pioneers in the chip based smart card also known as integrated circuit cards (IC Card) or chip cards. The concept of smart cards is not new to the world as it has been around since before the EMV version 2.0 was released in 1995. Since its initial release there have been many updates and currently is at EMV version 4.3. EMV smart cards are already in vast use in many countries including Europe, China, Brazil as well as others and recently here is the USA.
EMV smart cards carry two main benefits over standard credit cards. The two benefits are the improved security that has a direct correlation with reduced fraud and the ability to have a finer control of “offline” credit card transactions. There are more cardholder verification methods (CVMs) supported by the EMV smart card over the standard magnetic strip card increasing overall security and making offline transactions more accessible. The CVM features for EMV smart cards are signature, offline plaintext PIN, offline enciphered PIN, offline plaintext PIN and signature, offline enciphered PIN and signature, offline PIN, no CVM required, and fail CVM processing. By default the cards are “chip and PIN”requiring when possible to have the chip read and the PIN entered by the customer. This of course is the most secure way that a smart card transaction can be handled.
All business owners should have an EMV smart card ready terminal!
Due to the increase in security that the EMV smart card provides the United States has moved to converting cards and terminals over to be EMV enabled. The card companies (Visa, MasterCard, Discover and so on) implement the smart cards and greatly encourage their use by setting a ‘liability shift’ date. What does a liability shift mean when it comes to EMV smart cards? It means as of the date that is set, for each card brand of the liability shift, the merchant becomes liable for any fraud that stems from transaction systems that are not EMV capable.
This date has come and gone in the European Union as of January of 2005. Here in the US the liability shift dates for merchants have been set and now passed. American Express, Discover, Maestro, MasterCard, and Visa have announced that liability shift for point of sale terminals as of October 1st, 2015. The pay at the pump liability shift has been extended two additional years to October of 2017 with the exception of MasterCard where pay at the pump liability shift is set for October 2016.
To protect your business by accepting the EMV smart cards you may want to consider getting an EMV smart card ready terminal in your business. We offer both the Ingenico iCT220 & Ingenico iWL255 EMV smart card capable terminals free along with our month to month agreement. We took things a step further with the terminals we offer since they also support NFC (near field communication). This means the terminal can also accept payments from Apple Pay, Samsung Pay, and Google Wallet allowing the customer to pay with a smart-phone, smart-watch, or tablet.