EMV stands for Europay, MasterCard and Visa, a global standard for inter-operation of integrated circuit cards (IC cards or "chip cards") and IC card capable point of sale (POS) terminals and automated teller machines (ATMs), for authenticating credit and debit card transactions. It is a joint effort between Europay, MasterCard and Visa to ensure security and global interoperability so that Visa and MasterCard cards can continue to be accepted everywhere.
BENEFITS
EMV chip card transactions improve security against fraud compared to magnetic stripe card transactions that rely on the holder's signature and visual inspection of the card to check for features such as the hologram. The supposed increased protection from fraud has allowed banks and credit card issuers to push through a 'liability shift' such that merchants will eventually be liable for any fraud (in 2015) that results from transactions on systems that are not EMV capable. For transactions in which an EMV card is used, the cardholder will be assumed to be liable unless they can unquestionably prove they were not present for the transaction, did not authorize the transaction, and did not inadvertently assist the transaction through PIN disclosure.
CHIP & PIN VERSUS CHIP & SIGNATURE
According to issuer preference, some EMV cards are "chip and PIN" cards that require the customer to supply a 4-to-6 digit personal identification number (PIN) when making a purchase at PIN-capable terminals. The chips in these cards feature "PIN" at the top of the list of possible cardholder verification methods (CVM), but with a fallback option to signature (or even no verification at unattended terminals). Other EMV cards are either signature-only or prefer signature over PIN in their CVM list (i.e., signature at the POS, but PIN at unattended terminals or ATMs). These are often called "chip and signature" cards. As of 2012, chip and signature cards are more common in the US, Australia, New Zealand and some European countries (such as Germany and Austria), whereas chip and PIN cards are more common in other European countries (e.g., the UK, Ireland, France and the Netherlands) as well as in Canada. Chip and PIN cards have not been adopted in the US as of 2012 for a variety of reasons, including lack of PIN management features in ATM machines. These concerns are being addressed aggressively as EMV will be required within the next several years.
IMPLEMENTATION/DEADLINES
Visa, MasterCard and Discover in March 2012 - and American Express in June 2012 - recently announced their EMV migration plans for the US. In spite of these announcements, doubts remain over the willingness of merchants to develop the capability to support EMV. It is safe to say that the shift in fraud liability will most likely be the biggest impetus for merchant adoption..
- American Express is implementing a liability shift for point of sale terminals in October, 2015.
For pay at the pump, at gas stations, the liability shift is October, 2017.
- Discover is implementing a liability shift on October 1, 2015.
For pay at the pump at gas stations, the liability shift is October 1, 2017.
- MasterCard is implementing a liability shift for point of sale terminals in October, 2015.
For pay at the pump, at gas stations, the liability shift is October, 2017.
For ATMs, the liability shift date is in October 2016.
- Visa is implementing a liability shift for point of sale terminals on October 1, 2015.
For pay at the pump, at gas stations, the liability shift is October 1, 2017.
Many existing terminals are not capable of reading these newer cards. At TMC, we have been selling only EMV compatible devices for the past several months- even though some of the implementation deadlines are still years away. Most EMV compatible terminals (in the US) will be outfitted with Pin Pads that can handle magnetic stripe cards, chipped cards as well as Near Field Communication Cards (https://www.totalmerchantconcepts.com/services-a-solutions/near-field-communications-nfc)
Stay tuned to our blog for the latest information related to these new technologies and all of the upcoming news & changes in our industry!
