The EMV standard for credit cards is a global standard that is designed to promote safe and secure payments for merchants and consumers. EMV involves digital data transmitted through a credit card chip at the payment terminal, reducing the likelihood of fraud. A PIN may also be used to further confirm the identity of the cardholder.
Understanding the benefits of EMV for buyers and sellers and the cost of EMV equipment can help merchants make the transition.
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EMV stands for Europay, Mastercard, and Visa, which are the three countries that created the standard in 1994. The first EMV chip card was issued in 2010 to provide more security for specific clients with the aim of global expansion. In 2011, around 1.6 million users were issued chip and PIN debit cards.
Unlike the magnetic strips on older credit cards, the microchips in today’s credit cards contain more advanced levels of encryption that can protect against fraud. Instead of being swiped, these chips are inserted into terminals for merchants to accept payment information securely.
In 2015, MasterCard, Visa, American Express, and Discover, made an announcement that any merchants and issuers who did not support chip technology by October 2015 would be held liable for any counterfeit fraud.
In order to process payments, merchants must have access to an EMV enabled device, like a mobile reader or another POS system. The card with the chip will need to be dipped or tapped into or on top of the reader so that the information on the chip can be scanned.
During this process, the microchip generates a unique code that can only be used once, unlike a magnetic stripe card that contains data that can be easily accessed by a card-reading device and replicated in counterfeit credit cards. EMV cards also provide further security by requiring a PIN instead of a signature during purchase.
According to a 2018 study, chip technology has been found to reduce counterfeit fraud by 76%. This can reduce the financial burden on sellers since they will have to shoulder the burden of this cost instead of the customer. Furthermore, a PIN code provides additional safety compared to traditional magnetic stripe cards of the past.
Another benefit is that EMPV equipment can provide offline transaction verification and offline cardholder verification. Payment terminals can be configured to accept offline PIN codes from buyers, which is not supported by magnetic stripe cards.
However, merchants will have to purchase an EMV enabled device if they haven’t already, in order to take advantage of this new technology.
The EMV standard for credit cards also has convenient benefits for consumers. For instance, it allows contactless transactions to take place, which can speed up payments compared to traditional swipe payments. With the global pandemic, this can also be a safer option since it limits person-to-person contact.
In addition, EMV technology provides support for mobile wallets that can let customers pay with their smartphones. This gives them access to a wider range of convenient payment options.
One major concern related to EMV mandate equipment is the cost. It can cost between $500 to $1,000 to set up a business with EMV terminals, which can be quite a large investment for smaller businesses.
However, there are more affordable options on the market like Square’s EMV chip card reader which costs $47. It can work with mobile devices and doesn’t require other hardware. Ideally, it is best to purchase an EMV card reader outright rather than paying expensive rental fees that can add up down the line.
If you’re still on the fence about investing in EMV equipment, here are some of the most commonly asked questions by merchants.
Although EMV isn’t a legal requirement for businesses in the United States, it is the EMV standard for credit cards is widely accepted. This is because the major credit card brands have shifted liability to merchants and acquirers instead of card issuers in October 2015.
These days, most banks have issued customers with new credit cards and debit cards that come with EMV chips for greater security to be used with EMV equipment.
Generally, EMV chip cards are much safer than traditional credit cards that only have a magnetic stripe. This is because the chip provides encrypted data that is much more difficult for fraudsters to access. However, all credit cards come with risks, so you still shouldn’t disclose your personal payment information to anyone.
Ultimately, EMV chip cards are extremely effective in reducing the likelihood of in-store counterfeit fraud, and they are becoming more popular than ever due to the global EMV standard for credit cards. Because of this, businesses that choose to invest in EMV mandate equipment can have greater peace of mind and security when processing payments.
Read on to learn more about other safe and convenient payment methods for consumers on Processing Card today!
