EMV use in the US has finally taken over. We are behind many countries in adoption, but we’re getting close to catching up. Almost every POS system now has a chip reader, although they aren’t all functional yet. There has been a huge merchant and customer learning curve, but we’re getting the hang of it. Lots of people don’t know much about that little chip on their credit card. Here are the answers to the five most common questions about EMV chip cards.
- What does EMV mean? EMV stands for Europay, MasterCard, Visa. It is the global standard for chip-based Debit and Credit Card transactions.
- Why did these chips cards appear so quickly? The use of EMV chip cards, or “smart cards,” began in Europe in the early 2000s. The US was a late adopter compared to many countries. The integration into your wallets really happened in full force in October of 2015. This is when the US mandated a “liability shift,” which put the responsibility of credit card fraud onto the merchants, not on the credit card companies, if their POS system is not updated to be EMV ready. The idea being that there was a very effective way to drastically reduce credit card fraud, and if you don’t upgrade your POS system, then that’s on you. The ATM liability shift occurred on October 2016. The automatic fuel dispenser liability shift goes into effect October 2017.
- Why are they more secure than the magnetic stripe? The magnetic stripes on traditional credit and debit cards store contain unchanging data. Whoever accesses that data gains the sensitive card and cardholder information necessary to make purchases. That makes traditional cards prime targets for counterfeiters, who convert stolen card data to cash. Unlike magnetic-stripe cards, every time an EMV card is used for payment, the card chip creates a unique transaction code that cannot be used again. EMV technology will not prevent data breaches from occurring, but it will make it much harder for criminals to successfully profit from what they steal. (*from creditcards.com)
- How big of a problem is credit card fraud? Identity fraud hit a record high in 2016 with 15.4 million U.S. victims in 2016, Up 16 Percent from 2015. The total value of the frauds was $16 billion (*Business Wire). That’s a tremendous amount of money, and it doesn’t account for all of the costs and time associated with uncovering fraud and customer loss.
- Can EMV eliminate fraud? EMV will dramatically reduce in-store credit card fraud when it is used. However, criminals are malleable and will adjust. We saw a 40% increase in card-not-present (CNP) fraud last year as fraudsters realized they couldn’t use the cards directly any longer. It doesn’t eliminate all fraud, but it addresses a tremendous weakness and limits the risk associated with credit card payments.
Has your company made the switch yet? Are you EMV-ready or just EMV-enabled? Great Lakes Computers can install, maintain, and repair all types of POS systems including chip readers. If your systems aren’t working as well as they should, or you need help upgrading, we can help. Read our blog post about DIY POS care if you need tips on maintaining your valuable system.