EMV – which stands for Euro-pay, MasterCard and Visa, the three companies that started this standard –is the Global Standard for chip technology used to authenticate credit card transactions. This technical standard revolves around smart payment cards as well as the payment terminals and ATMs that accept them.
What is a Chipcard?
A Chipcard is a payment card that complies with the EMV standard. Some of these cards come only with the chip while others have stripes on the back for backwards compatibility when faced with terminals that don’t have EMV functionality.
What is NFC? (What is Apple Pay? Mobile Wallets? – Android Pay – Samsung Pay (in beta) – Any mobile wallet will work with an NFC terminal)
NFC, which stands for near field communication, is a short-range wireless connectivity standard that enables communication between devices when they’re touched together or brought within a certain range of one another.
With regard to EMV and Chipcards, NFC refers to the way that these cards can be tapped against a terminal scanner, which then picks up the card data from its computer chip. Instead of ‘swiping’ or ‘dipping’, consumers only have to pass their card over or tap it against the scanner in order to make their purchase, thus streamlining the purchasing process.
This also includes purchases via phone such as Apple Pay – a mobile payment and digital wallet service via Apple Inc. that allows users to use their bank/smart card-connected phone like a chip-card at NFC-capable scanners – and a wide variety of mobile and digital wallets.
What is the liability shift? (October 2015 – shift from liability from card-issuing bank to merchants)
The liability shift is a direct response to the fact that EMV Chipcard transactions improve security against fraud.
This liability shift has essentially been set up in order to ‘shift’ liability from banks and credit card companies to merchants in the event of a fraudulent purchase. If your terminals and other processing equipment aren’t up to standards or do not support EMV Chipcards by the time of the deadline (October 2015), then you run a very serious risk of taking on the weight of the liability and fraud.
Is getting new equipment mandatory?
No, you don’t have to get new equipment.
However, if you decide against getting new equipment, you’re leaving yourself open to being unprotected during the liability shift. This could mean that you and your business would be held responsible for the fraudulent transaction in the event that someone using a Chipcard in a pre-shift ATM or point-of-sale system isn’t who they say they are or the card owner reports a fraud.
You could be responsible for paying back anything purchased or withdrawn at your ATM or POS System.
What are the benefits of upgrading to EMV?
With the move to EMV equipment, there is better security, no liability shift – you are protected from it – and you’re able to take the new standard in electronic payment options.
With the rest of the world shifting over to EMV payments, it just makes sense to keep up.