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EMV Merchant Services | Chip & PIN Terminals, Credit Card Accounts

emv fraud protectionYou’ve no doubt heard a lot about EMV technology, but do you know how it will impact merchant services, specifically credit card processing terminals, and the way you do business?

EMV credit cards are the industry’s response to rampant credit card fraud. Last year, the industry lost $16 billion, a 45% increase over the previous year! It’s also shaken consumer confidence.

There’s currently a push underway by the credit card associations in which all merchants that handle customer-facing transactions must become EMV compliant by October 2015. This is known as the ‘EMV Liability Shift’. After that, card associations and processors may pass on any fraud losses that result from transactions on magnetic strip terminals to the merchant involved.

EMV technology has been around for 20 years and has become the global payment standard everywhere except the U.S. The European Union adopted the technology in 2005, and Canada followed in 2012.

EMV stands for Europay, MasterCard and Visa. The three companies joined forces to improve the security of authenticating credit and debit card transactions by adopting a universal standard for integrated circuit cards (IC cards or “chip cards”) and IC credit card point of sale (POS) terminals and ATMs.

American Express, Discover, and others, have also joined this smart card alliance, known as EMVCo.

emv merchant account terminalInstead of reading card data from a magnetic strip, EMV smart card data is obtained from an IC card/chip. This secure embedded chip makes it difficult to make counterfeit cards and the data transmitted for each transaction varies, so these cards can’t be skimmed.

EMV cards are authenticated either by signature (“chip and sign”) or PIN verification (“chip and PIN”). Eventually, all physical POS transactions will upgrade to allow for the acceptance of “contactless” where cardholders wave their cards in front of a merchant’s POS device to provide payment information (NFC or Near Field Communication) and “contact” EMV payment gateways.

EMV chips can be on cards, or embedded into key fobs or smartphones that have NFC technology.

Smart card-capable/EMV-compatible terminals resemble mag-strip terminals: they feature a special chip reader, or port, which collects data from embedded IC credit cards.

Consumers, card issuers, processors, and merchants all stand to benefit from the reduced risk of credit card fraud of chip-enabled smart cards.

Merchants will also see fewer chargebacks due to stolen or skimmed cards, and it will be easier to transact with international customers. Also, EMV compliance offers a gateway to future value-added features and mobile commerce innovations the technology promises.

For more information on how to prepare for EMV changes, or to learn more about IC credit card accounts and EMV merchant services, contact TTG today, at 1-888-383-8056 or sales@thetransactiongroup.com.