What is EMV?
EMV stands for Europay, MasterCard, Visa and was introduced by the Global payments brands in 2011.
When will EMV be implemented?
Specific timeframes have been implemented to roll out EMV across the United States. In 2011 Global payments brands introduced the roll out through having three specific time frames. The first time frame was set for April 2013 when all back end processors had to be equipped to accept EMV based payments from merchants. The second time frame will be in October 2015 when the liability of fraud will shift (excluding Automated Fuel Dispensers) and will fall on the merchant. The final milestone will be at the beginning of 2017 when Automated Fuel Dispensers will assume the liability.
What is a Smart Card?
A Smart card is also known as an EMV payment card. This type of credit card is equipped with smart chip technology. This chip contains the vital information needed to validate and run a secure transaction. The technology is used to help increase security for the merchant and consumer.
Is EMV more secure?
EMV is a more secure way for processing transactions. The smart chip technology allows the authentication of the card during the payment transaction. This authentication helps protect against counterfeit cards and creates unique transaction data that cannot be duplicated for additional transactions.
The card will also use a specific verification. This verification uses four different cardholder verification methods. Each method helps to confirm if the transaction should be authorized.
An additional feature with EMV smart cards are the option of chip and pin. Some of the cards that are issued will involve a chip and pin. In order to run a transaction the customer will be required to insert or tap their card for the terminal to read the chip. They will also be required to enter a four to six digit personal identification number.
How Does EMV work?
The chip within the smart card has an embedded encryption that contains specific information about the card and the user. This information is transferred through the equipment during a sales transaction. This encryption provides additional security levels when processing the transaction.
How do I run a Smart Card?
- The consumer will insert their EMV smart card into the point of sale devise (Figure 1 and 2).
If the chip is not able to be read by the machine it will prompt for a fall-back transaction and the customer will need to swipe their card (Figure 3).
- The cardholder will then enter their PIN if prompted.
- The chip and terminal will then determine the transaction type and generate the cryptogram.
- The cryptogram is then released and submitted to the processor to collect an approval or decline.
How will the Liability Change with EMV?
The liability for a business owner will change once EMV has been fully implemented in October 2015. Currently fraud from a business that runs face to face transactions will rest on the bank/issuer. Any loss within a fraudulent transaction is absorbed by the bank/issuer unless dispute resolution is passed onto the acquirer/merchant. This dispute resolution is also known as the chargeback system. In October 2015 the liability will then shift to card-not-present environments and merchants that are not using EMV capable solutions.
What Does an EMV terminal look like?
New Terminology
Chip and Pin: To perform a transaction a customer will be required to insert their card and enter a four to six digit personal identification number.
Chip and Signature: To perform a transaction a customer will be required to insert their card and provide a signature to the EMV terminal.
Dipping: A process where the card holders will insert their smart card into an EMV supported device. This is usually done through a slot within the EMV supported device.
EMV: Europay, MasterCard, Visa
Fall-Back Transaction: If the terminal does not accept the chip it will require the customer to perform a traditional swipe of the card in the terminal.
Smart Card: A credit card equipped with smart chip technology.
Article ID: 36000106350