October 1 marks an important milestone for both merchants and consumers nationwide. Starting on this date, it is recommended that most retailers utilize EMV technology or risk becoming liable for fraudulent charges. EMV is expected to eliminate around 40 percent of debit/credit card fraud within the United States. Since EMV is a brand new form of technology in the United States, there will surely be questions and concerns from not only consumers, but from merchants and banks as well. Here is a detailed Q&A on EMV-related topics to help answer the majority of questions that may arise:
Q: What will be happening starting on October 1st?
A: This is the date set by MasterCard, Visa, Discover, and American Express for merchants to start using chip technology, or face liability for any fraudulent charges that will occur at point-of-sale transactions. Gas stations are the only exception to this deadline, as they have an extension until 2017.
Q: Where did the term EMV originate from?
A: EMV stands for Europay, Mastercard, and Visa and was created in the 1980s. This technology has been present in Europe already for almost a decade with great success on keeping cardholder information secure. As of today, six entities regulate the EMV standards: Visa, Mastercard, American Express, Discover, China UnionPay and the JCB credit card in Japan.
Q: When will my debit and credit cards be replaced with chip cards?
A: Several banks have already started issuing chip cards that were set to expire soon. By the end of 2015, around 70 percent of credit cards and 50 percent of debit cards will have chips on them.
Q: How will I know if my debit or credit card has a chip on it?
A: The front of the card will contain a small metallic square around 1 centimeter in size.
Q: What items will be converted to accept EMV and what places will receive it?
A: Both debit and credit cards will be converted to chip technology. In addition, restaurants, retailers, and businesses will be able to accept EMV cards, but they will have to install new EMV payment terminals in their stores or face liability costs if fraud occurs.
Q: How will the EMV chip cards help prevent fraud?
A: Cards with chip technology are unique in the fact that the cardholder’s information is stored in a chip that is embedded in the card. When used during checkout, a one-time use code is generated for that transaction.
Q: What happens if I still have not received an updated chip card by October 1st?
A: Your old debit or credit card with the magnetic stripe will still work at stores and restaurants up until the expiration date. Consumers can contact their bank if they want, but many banks will have just started mailing out the new chip cards on or after October 1st.
Q: How popular are chip cards in the rest of the world?
A: According to EMVCO, 84 percent of cards in Europe contain chips and 97 percent of transactions are processed with chips. Chip cards are also prominent in South America and Mexico, with over 60 percent of cards containing chips and over 85 percent of transactions are processed with a chip terminal.
Q: How will I use my chip card at a retailer or restaurant?
A: Rather than swiping a card at the point of sale, customers will now insert their card at the bottom of the payment terminal and a unique, one-time-use code will be generated for that transaction. The card will stick out partially in the payment terminal and will not be completely inserted like at an ATM machine.
Q: What happens if I swipe my card and forget to insert it in the chip slot?
A: The terminal will show a message to insert the card below in the chip reader
Q: What can restaurants and retailers do to prepare their businesses for EMV technology?
A: Merchants will want to protect themselves from any liability starting in October by upgrading their Point-of-Sale (POS) systems or terminal(s), including any mobile processing devices, to EMV products. Although this may seem like a hassle to have to buy new equipment for your business and teach your employees a new transaction process, in the long run converting to EMV products could protect your business from costs incurred from credit card fraud.
Q: How can banks assist their clients with the conversion to EMV?
A: Banks can add significant value to the relationships with their clients by explaining the importance, timeline, and benefits of EMV. By becoming well versed on how EMV works and how it will affect both the merchant and consumer, banks will become a fundamental informational source on EMV.
The adaptation to chip cards and EMV technology will undeniably bring questions and concerns from consumers, merchants, and banks alike. Now is the time to start thinking about converting to EMV-compatible products and chip cards by the October 1st guideline to ensure the safety and protection of everyone involved with a transaction.