EMV Credit Card Processing FAQ

What is an EMV credit card? 

An EMV credit card is one with a smart chip feature. A card reader will review the chip on a card and confirm a transaction from there. The chip works like a magnetic stripe you’d find on an older card, but it comes with added security and fraud protection features.

What does EMV mean?

EMV is short for Europay, MasterCard, and Visa. These three card entities got together to develop the EMV standard in the 1990s. The parties developed the standard to reduce the risk of fraud or data theft.

How does an EMV card work?

An EMV card works with a payment acceptance device that can support such cards. It uses a few steps:

  1. The customer will insert one’s EMV credit card into the reader. The chip must enter the inside part of the device.
  2. The card terminal will read the data on the chip. It authenticates the data to ensure it is not a counterfeit card.
  3. The issuing bank will confirm the data and create a transaction. The transaction will include details on the retail outlet and the money that goes forward.
  4. The card will be approved or declined. The answer depends on the line of credit and how much money is there.
  5. The transaction is finished, as the necessary data has moved over the network and is deemed safe.
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The process takes an extra bit of time when compared with a magnetic stripe card, but it ensures accuracy. The card terminal will also list to the customer whether the card was accepted or declined.

What does the EMV chip feature?

The EMV chip on the card will feature small circuits bonded with a protective pad. The circuits include all the unique details surrounding the card. It is harder to copy or counterfeit the chip data than to do the same with a magstripe card.

The EMV chip also produces different codes for each transaction. This feature works differently from a magstripe card whose stripe never changes and is easy to duplicate.

How is the EMV card authenticated?

The payment terminal and card network will authenticate the card by reviewing the data in the chip. It will identify specific code details that are more thorough than what a magstripe card uses. The design reduces the risk of fraud.

Can a separate verification feature work?

Some EMV cards may support a secondary verification system to confirm the customer’s data. The customer might need to enter a PIN or provide a signature. Such secondary measures add protection and ensure a customer who physically acquires someone’s card cannot use it elsewhere. Not all payment terminals will support these additional security measures.

Customers can insert their EMV cards into terminal slots. But can they use other methods for processing their cards?

Some EMV cards support near-field communication or NFC systems. The customer can tap a card near a scanner that can read NFC data. The scanner will read the contents in the chip.

Some older cards use magnetic stripes, but they are not as prominent today. These stripes were in first-generation EMV cards to support the transition between card formats.

What happens if fraud occurs with an EMV card? Who is liable for the losses?

The issuing bank is responsible for the costs associated with the fraud. The terms will vary by card, but the issuing bank is typically responsible for the issue. But retailers that do not meet PCI compliance standards may also be held liable for losses and legal actions. Businesses that are incapable of handling EMV-based transactions may also be liable for some losses.

I have a retail space, but my systems cannot support EMV cards at this time. Can I still accept them?

Some EMV cards also feature magnetic stripes to make them work on old and new terminals alike. It is strongly recommended you start investing in EMV technology to read future cards. More recent EMV cards will be more likely to come with NFC features and not with magnetic stripes.

Can my business read EMV transactions while offline?

EMV cards can utilize a static data authentication process where info surrounding that card will be read by a terminal. Data is authenticated between the terminal and card. The issuing bank doesn’t need to be contacted here. You can send the payment information to the proper bank after you get back online. The process ensures you can collect payments from anywhere, including places where online signals might not be easily accessible.

How can EMV cards work with PCI DSS standards?

EMV chips can work with PCI DSS standards to reduce the risk of fraud. But while EMV chips help protect transaction data, businesses must manage PCI DSS rules themselves. Your business can protect customer data by using proper data encryption standards when handling customer payment data. You could also store the data well and avoid reporting things like PIN and CVV values when recording data. You can contact a PCI compliance officer to help you review what you should be doing when meeting these rules.

Where are people using EMV cards?

EMV cards were first utilized in Europe. They have since expanded into many other countries, although they are not as prominent in the United States. As of 2018, EMV cards have a 60 percent adoption rate in the United States. The total is less than the 80 percent rate found in Europe, Canada, and various other places. EMV cards are expected to become more prominent as more people and businesses explore the benefits that come with these cards.

Will magnetic stripe cards become extinct?

Card companies are not obligated to stop producing magnetic stripe cards. But they may not be likely to create them soon. This point makes it more essential for retailers to start focusing on accepting EMV cards. People will start to become used to these cards and will not use magstripe ones as often as in the past.

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