More commonly referred to as Chip Cards — originating from the Chip-like sockets placed at the top of the plastic — EMV is a new standard of payment developed with a keen focus on security. That’s the main difference between these and the classic magnetic strip, its data security features being miles ahead of the commonplace counterpart. These features come in the form of simple programs that operate in tandem with the transaction, by automatically populating a special per-transaction code that accurately identifies the cardholder data while simultaneously protecting it. Most fraud occurs by scammers stealing customer data from magnetic stripe transactions, and this code identification system prevents this data from being effectively reproduced.

EMV is named after the financial institutions that helped develop the new standard of payment, EuroPay, Mastercard, and Visa. However, its operations are overseen by a multitude of financial institutions, so it’s sometimes labeled as EMVco.

The Good and Bad

As stated previously, magnetic swipe-style cards are vulnerable to multiple different types of fraud. Its all-or-nothing data collection procedures mean issuing banks can only identify customers based on a provided signature. EMV’s security producers immensely negate this potential for fraud, utilizing your traditional PIN to identify the proper card holder in addition to the unique security features it already provides.

However, this doesn’t do much for online or over-the-phone purchases where the card is not present. At this point, they are just as vulnerable to card-not-present (CNP) fraud as the traditional magnetic strip.

Even more damaging is EMVs’ positive effect on card-present transaction protection.  It gives card-issuing banks enough credit to shift the liability of fraud from them to the merchant by rendering merchants at fault if they don’t follow these newly instated security procedures.

If you take the time to integrate this new hardware and train your team, the liability will still shift back to the bank. So, if you properly integrate this new software and train your team quickly and efficiently, you should be able to properly swing the fraud responsibility away from your business.

The Effect on Customers

Consumers are likely to notice very few differences in how they pay when utilizing EMV. The smallest change they may see is the slight transaction delay induced by the sophisticated security methods of EMV chips. But the magnetic strip is still present on most EMV chip cards, so the opportunity for a smooth transition is provided.  In other words, merchants and consumers who need more time to change over can shift at their leisure.

Merchants Next Step

Despite its insufficient fraud protection for card not present transactions, and the shift of fraud liability from banks onto merchants; EMV security is worth the few headaches and hiccups. At some point, you can’t keep avoiding these growing changes, especially when it spreads to such an integral part of the business. Integrating this system and training your team on these new procedures at a pace your business can handle, is the safest solution for preventing future roadblocks. However, due to EMV’s weak spot in CNP transactions, merchants conducting operations exclusively online don’t need to shift with such urgency.

Any business conducting physical transactions without the integration of EMV inadvertently places itself at a greater risk of fraud, and deters away clients accustomed to this now commonplace payment method. If you’re too busy running your main operations to focus on updating your system, contact us at RevitPay. We’re a merchant services provider that can educate you on proper EMV payment procedures and equip you with the ideal POS terminal for your clients and your business.