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What Is EMV?
EMV stands for the European MasterCard Visa consortium that
developed new payment card technology, utilizing embedded
chips. EMV is a set of standards designed to protect debit and
credit cards that are accepted at the point of sale, as well as
ATM transactions. The EMV standards were formed by Europay,
MasterCard and Visa in 1993. EMV standards define the
interaction at the physical, electrical, data and application levels
between an integrated circuit (IC) chip embedded in a plastic card
and the point-of-sale terminal or device that reads the IC card for
processing EMV financial transactions.
EMV chip-based payment cards, also known as smartcards, contain
an embedded microprocessor, a type of small computer. The
microprocessor chip contains the information needed to use the card
for payment, and is protected by various security features. Chip cards
are a more secure alternative to traditional magnetic stripe payment
cards. That security is further enhanced when used in conjunction
with a PIN (personal identification number).
EMV’s payment security approach is based on smartcard technology
that adds dynamic security data to the transaction stream,
authenticating that the card is present at the point of purchase.
Additionally, every card contains its own microprocessor chip,
making the cards more difficult to economically counterfeit.
Today, there are more than 1.5 billion EMV cards deployed in more
than 120 countries on four continents. “By the end of 2015, 70% of
U.S. credit cards and 41% of U.S. debit cards will be EMV-enabled,
says Aite Group.”
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The United States will be the last developed
country to migrate to EMV.
Accepting EMV at Your Location
Restaurants are able to accept EMV cards in two ways. One method
is to insert the EMV card into a card reader that is integrated in
the terminal or PIN pad. This is referred to as an EMV contact
transaction. Another way for merchants to accept EMV cards is
contactless, where the card is tapped at the terminal or PIN pad’s
contactless reader for payment acceptance. Restaurants should
work closely with their point-of-sale provider to determine EMV-
enabled point-of-sale options.
What Benefits Does EMV Provide for Merchants?
Restaurants that implement an EMV solution may benefit from a
reduction in card-present fraud, decreased requests for copies, and
fewer disputes, as well as the unrelated but valuable opportunity
to update terminals for other capabilities like Near Field
Communication (NFC)
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contactless acceptance.
What Is the Liability Shift?
Visa, MasterCard, Discover and American Express have mandated
liability shifts for fraudulent transactions effective October 1,
2015. Generally, liability will shift to the party using the least
secure technology.
For counterfeit fraud, liability will shift to a restaurant when
a counterfeit mag strip from a chip card is used at a mag stripe
terminal. The merchant has not upgraded to EMV and is therefore
less secure.
For lost and stolen fraud on MasterCard, Discover and American
Express cards, liability will shift to restaurants when a lost or stolen
“chip and PIN” card is used at a less secure terminal. For Visa, the
issuer will continue to be liable for lost and stolen fraud.
EMV and Restaurants:
What You Need to Know
By Mike English, Executive Director, Product Development, Heartland Payment Systems
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Near Field Communication (NFC) is a short-range wireless connectivity technology (also known as ISO 18092) that provides intuitive, simple and safe communication
between electronic devices.
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