Over the past six years, businesses have been challenged with the implementation of EMV credit card processing. This method has replaced traditional credit card processing for a more secure payment system for customers and businesses alike.
What is EMV? Why is it so important for businesses to implement it correctly?
What Does EMV Stand For?
EMV stands for Europay, Mastercard, and Visa. Smart chip-enabled credit, debit, and prepaid card technology, including contactless cards, referred to as EMV cuts fraud in half, protects businesses, and represents a secure global standard of payment system for consumers and businesses worldwide.
Founded in the 1990s, EMV is an international standard for point of sale authentication of card transactions. Sometimes referred to as IC or chip-and-pin cards, EMV is, without doubt, the safest payment system on earth for businesses and consumers. Surprisingly, many businesses are either unclear or uncertain on how to implement EMV technology into their operations.
What Is EMV Compliance Law?
EMV compliance regulations ensure consumer protection against fraud and safeguard businesses against fraudulent chargebacks. Therefore, getting compliant means upgrading point-of-sale (POS) systems to accommodate EMV chip cards.
Europay, Mastercard, and Visa requested point of sale terminal upgrades by October 1, 2015, but, as yet, a significant number of merchants have failed to do so. While there have been limited reports of sanctions for non-compliance so far, there can be stiff penalties and significant fines for merchants and vendors if they do not comply with EMV regulations. The good news is EMV is simple to implement, and there’s still time to avail businesses of all the benefits that EMV has to offer.
What Does EMV Mean for My Merchant Account?
All U.S. merchants are now responsible for making the technology upgrades necessary to support EMV. October 2015 signified the date on which the merchant will absorb any fraudulent transaction claims.
This means that if any contact chip card is used with a merchant who has not adopted EMV POS terminals, the entire liability for the fraud will be on the merchant. Merchants cannot afford to have this level of liability, reputational and financial risk dangling over them every time they accept an EMV payment when implementation is so quick and easy.
Why EMV Compliance Is Important
EMV Compliance Removes Financial Liability from the Merchant
If a merchant is not EMV-compliant, in-store fraud liability is theirs and theirs alone. A merchant will be liable if:
- The POS equipment is not EMV compliant.
- The POS equipment is used, but the card is not a chip card.
If the POS equipment is EMV-compliant and the customer uses a chip card, the liability is on the bank for in-store fraud. So, it’s in the merchant’s best interest to ensure that POS equipment is EMV-compliant. In doing so, merchants are fully protected against fraud and chargebacks.
EMV Compliance Helps Prevent Fraud
EMV helps fight fraud by bringing modern technology to consumers and businesses. Gone are the days when a signature was all that a criminal needed to commit fraud. 1970s magnetic strip technology has also been replaced with two key elements:
- EMV cards cannot be cloned
- PIN codes are used instead of a signature
The algorithmic makeup of the card chip makes the card almost impossible to clone, which is a severe blow to fraudsters. The pin-based technology also removes the risk of signature fraud. Estimates suggest that card fraud has fallen by over 60% since the inception of EMV.
EMV Compliance Meets Consumer Demand
EMV has become a competitive advantage for merchants and businesses. Becoming EMV-compliant shows customers that merchants adhere to the highest compliance, technological, and security protocols on the market. Moreover, being EMV-compliant protects both merchants and consumers against the effects of fraud.
Make sure your card readers accept both chip and magnetic stripe cards. Adept Payment’s EMV-compliant readers accept both, ensuring you are both EMV-compliant and safe from liability for fraudulent activity. Call us today at (888)-732-3838 to learn more about converting your POS equipment!