EMV, a supposedly more secure method of payment has been receiving much criticism in the past months and isn’t exactly being accepted with open arms. So October is around the corner, but what about EMV?
A recent survey conducted by Gfk Public Affairs shows that the major shift from mag-stripe to EMV has much farther lengths to go before the Oct. 2015 deadline. The survey shed light on possible reasons why this shift will take longer than expected. According to Finextra, only about 10 percent of all people surveyed have received a chip-enabled debit or credit card from their bank.
What About EMV That Is Important In October?
However, it seems as though it is not just the consumers that aren’t exactly prepared for October. According to the latest Wells Fargo/Gallup Small Business survey, just about half of SMB owners weren’t even aware that there would be a liability shift coming Oct. 1. Also, out of the small businesses surveyed only 31 percent of businesses that accept credit cards had a payment processing device capable of accepting the chip cards. With a little less than half of business owners blaming the hesitation to switch on the high cost of upgrading, it’s become highly competitive for merchant services to get businesses upgraded at a low cost to the merchant.
It seems as though a shift in liability for the merchant would be enough reason to make the switch. Avoiding liability for fraudulent charges when someone uses a counterfeit card seems like a safe measure that businesses would want to take. After last year the U.S. was held home to $3.89 billion in losses due to counterfeiting, but even that substantial loss isn’t enough reason for the 21 percent of SMB owners that never plan to switch to EMV.
It’s almost an even split on whether or not the American population actually believes EMV will actually reduce fraud. However, it is a common concern for a majority of Americans to have high or extreme concern for their personal information when shopping in-store and online.
Whether your business is up-to-date with EMV chip readers already, or you plan to upgrade in the future EMV will be the future of all credit card processing. One will probably not see the widespread use and acceptance of EMV cards by the expected date, Oct. 1. It is clear that people have their doubts about the change in the way cards a processed and some are simply just not informed. The best thing you can do for your business is get informed and find out when the best time to switch to more secure processing is.
Feel free to make the switch today with Host Merchant Services. As always we offer free equipment including the latest in EMV card readers so you can provide the safest credit card processing for your customers.
What is EMV?
EMV, an acronym, for Europay, Mastercard, and Visa represents the efforts of these three companies in developing a standard for credit card processing. The main purpose of EMV is to enhance the security of credit and debit card transactions by incorporating a microchip into the cards. This microchip generates a code for each transaction, unlike magnetic stripe cards that store and transmit static cardholder data. By doing EMV makes it more challenging for criminals to use stolen card information.
The introduction of EMV technology primarily aims to combat card fraud at point-of-sale terminals. When an EMV card is used at a chip-enabled terminal the microchip interacts with the terminal to create a transaction code often referred to as a “token” or “cryptogram.” This code varies for every transaction providing a layer of security compared to the fixed data stored on stripe cards.
EMV technology has gained traction across regions worldwide and has proven effective in reducing certain forms of credit card fraud. Apart from its security features numerous countries have adopted EMV as their standard, for card payments to align with global security standards.
Benefits Of Using EMV
EMV technology, which stands for Europay, Mastercard, and Visa has advantages that primarily focus on enhancing the security of credit and debit card transactions. Here are some key benefits of utilizing EMV;
- Decreased Counterfeit Fraud: With EMV cards each transaction generates a code making it challenging for criminals to create cards. This significantly reduces the risk of fraud, at point-of-sale terminals.
- Authentication: The chip embedded in EMV cards provides authentication meaning that each transaction is assigned a unique code. This offers enhanced security compared to magnetic stripe cards that rely on data remaining the same for every transaction.
- Heightened Security for Card-Present Transactions: EMV technology is particularly effective in securing in-person or card present transactions. The chip technology adds a layer of protection beyond the stripe, which can be easily copied or cloned.
- Compatibility: EMV has become a standard simplifying card usage for travelers internationally. Numerous countries have. Are in the process of adopting EMV technology ensuring a secure payment experience worldwide.
- Liability Shift: In regions where EMV implementation has taken place there is often a shift, in liability associated with card fraud.
If a merchant has not upgraded their terminals to comply with EMV standards they may be held responsible, for types of transactions that could have been prevented if they had chip technology. - Enhanced Methods to Verify Cardholders: EMV offers ways to verify cardholders, including the use of a Personal Identification Number (PIN) which adds a layer of authentication for card users.
- Promotes Contactless and Mobile Payments: EMV technology often supports contactless payments allowing users to simply tap their cards or use devices for transactions. This provides convenience for consumers while maintaining the security features of EMV.
- Reduces the Risk of Skimming: EMV cards are less vulnerable to skimming a technique used by criminals to capture information from stripes. Since the chip generates codes even if someone intercepts the card data it cannot be easily replicated for transactions.
While EMV technology significantly enhances the security of in-person card transactions it is important to note that it primarily focuses on scenarios where the physical card is present. Online transactions, where the physical card is not used directly may still require security measures, like Secure authentication.
