The Buzz on EMV
Applies to Accel, American Express, China UnionPay, Discover, MasterCard, NYCE Payments Network, SHAZAM Network, STAR Network and Visa
Effective October 1, 2015, the U.S. payment networks noted above are implementing EMV fraud "liability shifts." With these liability shifts fast approaching, many merchants, cardholders and card issuers are wondering who is liable for what, and when, under these fraud liability shifts.
“The transition to EMV cards involves new procedures, regulations and support. This will impact many of our business clients,” comments Kellie Lindblom, assistant vice president of merchant services for Cedar Rapids Bank & Trust. “Our skilled merchant processing team is well-versed with the new EMV standards and is committed to making this a smooth and successful transition. We are actively converting merchants and working one-on-one to help our clients minimize high cost equipment and educate their staff.”
As part of our ongoing effort to provide exceptional customer service, Cedar Rapids Bank & Trust would like to take a moment to educate you on EMV technology in credit and debit card processing and the benefits to your business.
What is EMV?
EMV cards are based on a global card payment standard called Europay, MasterCard, Visa, currently used in more than 80 countries. EMV is a fraud- reducing technology that can help protect you against losses from the use of counterfeit, lost or stolen cards at the point-of-sale. EMV cards are embedded with a computer (smart) chip which will store a customer's card data. The EMV terminal will communicate with the chip inside the customer's card to determine whether or not the card is authentic.
What is an EMV/Chip card?
- EMV/Chip cards are payment cards that have an embedded chips which offer advanced security when your customers use their chip to pay in store.
- EMV payment cards are commonly referred to as “chip & pin” cards because the chip card is often coupled with a PIN code for advanced security.
- EMV cards can also be processed through Near Field Communication (NFC) and coupled with either a PIN code or signature for advanced security. The issuing bank determines whether a PIN code or signature is required.
Why are EMV card transactions more secure?
EMV card transactions offer advanced security for in-store (card present) payments by making every transaction unique. And, EMV cards are virtually impossible to counterfeit or copy. EMV cards generate a “dynamic code,” which means the security code changes for each transaction. That way, if a card is copied or compromised, the data cannot be used to make multiple transactions. In contrast, the data transmitted by magnetic stripe cards never changes and, once compromised, can be used over and over for countless fraudulent transactions.
What about transactions utilizing online processing?
While the new EMV technology applies to in-store/card present transactions only, we know that card "criminals" will likely try to target the internet systems too. Cedar Rapids Bank & Trust and our partner, BASYS Processing, have taken steps to help those merchants using online processing by adding features within BASYS IQ. IQ offers end-to-end encryption and tokenization in the programming, which provides you with another layer of security when processing cards. Each year, our dedicated PCI team makes sure to keep our merchants compliant by helping with the annual survey and the monthly scans on the system.
How do I know if a customer has an EMV card?
The customer's card will have a chip on the front of it. The magnetic stripe remains on the back.
How is an EMV card used at the POS?
- Dip/Dipping: Instead of swiping a card, customers insert an EMV card into the POS terminal, much like an ATM. Inserting the card and removing it is called “dipping.”
- Tap & Pay or Wave: When using a contactless card, there is no dipping. The card is “tapped” or “waved” against the POS terminal. One quick tap establishes connection and verifies authorization.
Can customers still pay in store if they don't have an EMV card?
Yes, EMV-enabled terminals will still accept magnetic stripe card payments for customers who do not have an EMV card.
What does an EMV-enabled terminal look like?
EMV-enabled terminals have all of the features you are used to with a payment terminal, with the addition of a slot for the customer to insert their card. The slot is typically located at the bottom or the top of the payment terminal.
What if the terminal doesn't accept EMV cards?
EMV cards will still have a magnetic stripe on the back; so even if a terminal is not yet EMV-enabled, customers can use their card as they do today.
I have EMV-enabled terminals. When do I tell my customers?
- Before: focus on training cashiers and staff to help customers complete a transaction.
- During: focus on the customer experience; cashiers and staff can advise customers to follow prompts and help them with insertion and removal of the EMV card.
- After: focus on customer experience; continue to provide training for cashiers and staff as necessary.
I have EMV-enabled terminals. How do I tell my customers?
Your investment in new terminals will pay off by building trust and loyalty with your customers. You can let them know you have made the change on your website or by advertising, in-store and point of sale signage, social media, email and direct mail. You can also use your receipts, your staff and your call centers to let customers know that you care about their safety and security.
What should a cashier communicate to customers about using their EMV card?
Teach your cashiers to coach the customer. If they notice that the customer has an EMV card, they should tell them to insert the card or "dip" the card to do an EMV-enabled transaction. Remind customers to leave the card int he terminal and follow the prompts. Then make sure the customer takes their card when the transaction is completed. Until they get used to "dipping," they may forget that the card is still in the slot and walk away without it.
What does the liability shift really mean for your business?
Visa, MasterCard, American Express, and Discover have announced on October 1, 2015, counterfeit fraud liability, which has traditionally been assumed by the card issuer, will be absorbed by the party that does not enable EMV during the fraudulent card present transaction.
The counterfeit liability shift for the above-listed networks for the U.S. are summarized in the following chart:
|EMV Capability: Card||EMV Capability: POS||
Counterfeit Liability after October 1, 2015 Lies with:
|Magnetic stripe only card||Terminal not enabled for EMV card||Issuer|
|Magnetic stripe only card||Contact-EMV-enabled||Issuer|
|Counterfeit magnetic stripe card with track data copied from an EMV card*||Terminal not enabled for EMV card||Acquirer/Merchant|
|Counterfeit magnetic stripe card with track data copied from an EMV card*||Contact-EMV-Enabled||Issuer|
For additional information or questions, please contact Kellie Lindblom and the CRBT merchant processing team at 319.743.7002.