EMV®: Frequently Asked Questions

What is EMV?

EMV is a chip technology used globally in place of magnetic stripe. EMV chip technology helps to reduce card fraud in a face-to-face card-present environment, provides global interoperability and enables safer and smarter transactions across contact and contactless channels. EMV was conceived by EuroPay, MasterCard and Visa (EMV). This group now includes representatives from all major world brands including American Express, Discover, JCB and UnionPay, and makes up the governing body referred to as EMVCo (EMVCo LLC).

Why EMV and why now?

EMV has been the credit card standard in most industrialized nations for years. The United States is among the last hold-outs, and technically-advanced criminals have exploited that situation. EMV is a much more secure model for processing payments, so thieves have naturally gravitated toward the easier-to-steal data on magnetic stripe cards. The result has been a series of high-profile and damaging card data breaches. In fact, while the U.S. accounts for only a quarter of the world’s transactions, about half of all credit card fraud happens in the United States. EMV will correct that disparity and help make digital commerce safer.

Is it really mandatory? Why should I care?

Click to expand

Links to Visa and Mastercard Mandates

http://usa.visa.com/download/merchants/bulletin-us-participation-liability-shift-080911.pdf

http://www.mastercard.us/mchip-emv.html

Is the liability shift a government mandate? Is this a law?

EMV is not a law, nor is it mandatory for merchants. However, after the flurry of recent high profile data breaches, the industry has agreed to a liability shift to occur in October of 2015.

Do I have to implement EMV?

Technically, no, there is no mandate. We strongly encourage all merchants accepting card-present transactions to migrate to EMV. However, merchants can consider questions such as these in determining their EMV strategy: What is the total cost of implementation? What is my current fraud chargeback liability, and does moving to EMV make sense in light of the potential impact to my business? What other security solutions do I have in place to help with chargeback liability? If I don’t do EMV, how can I make sure customers are protected when paying with a card at my business?

What does it mean to me when EMV liability shift happens?
       What if I don’t want to hassle with EMV, what exactly is the consequence?
       Will I incur fines? From whom?

A liability shift will occur in October, 2015—the liability for fraudulent transactions will move from card issuers to merchants if an EMV card is presented for payment at the merchant and it is swiped or entered manually and the transaction is fraudulent. In this scenario the merchant would be liable for the fraud, not the issuer and the merchant could potentially be presented with fines from the card brands.

Merchants should consider the following when or if they should implement EMV: What is the total cost of implementation? What is my current fraud chargeback liability, and does moving to EMV make sense in light of the potential impact to my business? What other security solutions do I have in place to help with chargeback liability? If I choose not to implement EMV, how can I ensure my customers are protected when paying with a card at my business?

Will I be charged more if I don’t implement EMV?

EMV is a card network initiative. Currently, the card networks will be charging the same interchange rates for EMV and non-EMV transactions. OpenEdge has no control over network interchange rates or knowledge of changes in the future.

What Does the Liability Shift Really Mean?

In short, the liability shift means that the party that does NOT support EMV technology will be liable in a chargeback. For the issuer, that technology is represented by the EMV chip cards and for the merchants it is represented by EMV-ready terminals. In case of a technology tie, the fraud liability remains with the issuer.

There are two scenarios involved in the liability shift1:

  1. Counterfeit cards: if a merchant accepts a counterfeit magstripe card (created from an EMV chip card or transaction data) at a payment device that is not EMV-ready, the merchant will be liable for the chargeback resulting from the fraud. Keep in mind, that a counterfeit card created from an EMV card (or transaction data) can only be processed at a magstripe-only terminal. If the merchant’s payment solution is ready to accept EMV transactions, this counterfeit card will not be processed and therefore removes the merchant from the liability. Note: In regards to "fallback" transactions where EMV chip technology is used but due to outside factors (i.e. card reader error, damaged EMV chip) the transaction is completed by magstripe after failing as EMV, the liability will remain with the card issuer.
  2. Lost or Stolen cards: if a merchant accepts a stolen EMV chip card that requires a PIN using a payment device that does not support EMV with PIN entry, the merchant will be liable for the chargeback resulting from the fraud. Note: The liability shift does not include transactions under the threshold of the card brands that do not require signature or PIN. These are typically low dollar transactions with merchants in low risk industries. These thresholds are set by the issuers and the liability on these transactions will remain with the issuers.

Do you have me covered?

It’s a big change. And it’s coming soon. But preparing your payments strategy for EMV doesn’t have to be frightening, time-consuming or expensive. OpenEdge has invested time and resources to ensure we have EMV solutions in place that minimize disruptions to your business. We’ve done the heavy lifting on your behalf – our solution shields you from a lot of the complex work to prepare for EMV and allows you to quickly implement EMV in your payments environment.

The OpenEdge EMV Solution

Our solution delivers an integrated, certified secure payment processing solution that minimizes the level of effort needed for implementation and includes ongoing updates to keep the payment processing technology current. The OpenEdge EMV solution supports multiple peripheral device options and is Card Brand-certified, providing these benefits:

  • Swift Implementation
    Because the development time required for EMV support is reduced, we can prepare you for EMV quickly and well ahead of the liability shift.
  • Future-Proof
    Any new technology undergoes a period of adaption and experimentation, implementing new features over time. Our EMV solution is sophisticated and feature-rich, incorporating trending technologies that will grow in acceptance: Near Field Communication (NFC), Apple Pay, tokenization, point-to-point encryption and more.
  • Device Flexibility
    EMV and magnetic stripe technologies will co-exist for some time. Your OpenEdge hardware will accept all transaction types. As consumers grow accustomed to paying on different platforms (smart phones, tablets, new mobile devices), we’ll be ready – and so will you.
  • Ready. Set. Go.
    EMV supported terminals from OpenEdge are available for you to purchase today. We also offer a rental program to help you manage the expense of the new devices.

When will it be available? How much does it cost?

OpenEdge has EMV terminals available today. They will be EMV ready by Summer 2015 with a simple software update. Software updates are quick, estimated at 5-15 minutes depending on communications interface type.

EMV is a card network initiative. Currently, the card networks will be charging the same interchange rates for EMV and non-EMV transactions. OpenEdge has no control over network interchange rates or knowledge of changes in the future.

OpenEdge has EMV terminals available to purchase or for a monthly rental fee.

What are the next steps?

The liability shift for merchants begins October 2015. This applies to all merchants except automated fuel dispensers that have an extended liability shift until 2017.

Merchants can upgrade their hardware devices today with OpenEdge and begin accepting EMV transactions before the liability shift.

If merchants are would like to postpone upgrading until after the liability shift, they can also upgrade to EMV terminals at anytime.

1Visa has announced liability shift for counterfeit cards only. Mastercard, American Express and Discover card have announced the liability shift for both counterfeit as well as lost/stolen cards.

Contact Us about EMV





 

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