EMV, Card Security Standards, and US Merchants

What is EMV?

EMV stands for Europay, MasterCard and Visa - and represents the founding entities of a global card security standard - already widely adopted "abroad" - using chip card technology for both contact and contactless transactions.  Cardholder verification - similar to our current magnetic stripe cards - use both pin and signature verification methods. 

The chip or smartcards, contain an embedded microprocessor (the equivalent of a small computer - no kidding!) with strong security features.  EMVco - an organization that consists of the major card brands - exists to ensure specification standards for the chips/cards as well as card acceptance devices.  The increased security gained with these cards is due to unique dynamic digital data for every transaction - reducing the overall risk of fraud (the changing data makes duplication difficult unlike data stolen from cards with magnetic stripes).  Payments are getting both smarter and safer.

How do EMV standards impact US Merchants? 

Chicken or the Egg?

US Banks have definitely been slow to implement widespread EMV chip card technoloy in their consumer issued credit cards but card brands continue to push for migration to the new technology because of the increased security.  Effective this past April 2013 - processors (that's us) are required to support merchant acceptance of EMV chip transactions - a deadline XBS and Priority Payments has met. 

The April 2013 deadline however, was in preparation for a liability shift for fraudulent transactions/activity from issuers to merchants who do NOT process at least 75% of their transactions through an EMV enabled device, by October of 2015 (with an exception for fuel dispensers who have longer).  Visa and MasterCard issuing US banks are substantially increasing issuance of cards with the new technology.  The liability shift adopted by the major card brands is in place to strongly encourage merchants to upgrade to terminals enabled for EMV technology. While merchants must still adhere to PCI DSS standards - VISA is relaxing annual validation requirements (think SAQ) for merchants who meet the 75% of all credit card transactions being EMV authenticated criteria.

Priority Payments XBS and XBS are already placing terminals/POS equipment that is enabled with chip card acceptance technology.  There is a direct correlation between EMV implemenation and reduction in fraud loss.  There's a good deal of time of course, before the liability shift occurs and some kinks that need to be worked out regarding the new technology and current US regulations (Durbin Amendment) - but no doubt,  credit card payment processing in the US is making the move to safer, smarter payment processing with EMV card security standards and technology.  See this chart for more information on key dates for EMV adoption and call us at 800-347-1090 with any questions!

Additional Resources

Click Here for a comprehensive list of EMV FAQ's by Smart Card Alliance - a non-profit, multi-industry association working to promote understanding, adoption, and use of smart card technology.

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