As of
October 15th, of 2015, if a merchant is not processing on an
EMV capable machine they will be responsible for 100% of any fraudulent transactions they accept and would have absolutely no recourse. If they take a fraudulent transaction they are going to have to pay for it and there is no other liability avenue to pursue. This is for any transaction whether it was made on an
EMV card or a regular magstripe. In time, consumers may not feel comfortable paying at a business that only accepts magstripe transactions. Foreign consumers are already accustomed to paying with
EMV and some foreign cards do not even have a magstripe anymore, so a business owner could lose those transactions all together.
What is EMV?
EMV, (or “EuroPay, Mastercard, Visa”), is the global card technology of choice and it is finally coming to the US. This technology will replace the magstripes we have become so familiar with and will ultimately alter the payment procedure for millions of consumers and cause thousands of business owners to upgrade equipment at the point of sale.
EMV is not a new technology; In fact there are an estimated 2.36 billion
EMV cards worldwide and 37 million
EMV terminals. The US is just the last major country to adopt this standard.
EMV was developed in the UK to combat the duplication of counterfeit cards and has been extremely successful in rendering stolen card data useless to thieves. The latest figures from the European Central Bank indicated in an August report that as much as
78%of all counterfeit card fraud is carried out in countries that have yet to transition to EMV. Hence the reason that the
US is now the global leader in card fraud with 47% of local fraudulent transactions although it does only 23% of the transactions globally. Coupled with tokenization and encryption,
EMV is the ultimate in security within the payments industry and will help to reduce fraud within the US.
EMV cards utilize chip based technology vs. the traditional magstripe on the back of payment cards. These chips are much more advanced than the magstipe technology that is currently in use today. The customer profile is built into the chip, giving the card issuing bank much more control of the card capabilities. You can deactivate a card remotely, and can even set up an offline balance where the consumer can make purchases up to a certain amount without the terminal communicating to the processor to verify. Finally as a feature, you can require no customer verification under a certain amount – ex. no sig or pin on a transaction under $200.
There are different Customer Verification Methods (CVM) that can be used for an EMV transaction on both credit and debit cards.
- Chip and Pin
- The cardholder will have a unique 4 digit PIN that they will enter to complete the transaction (ergo: “PIN Debit”)
- Chip and Signature
- The consumer would still insert the card but would only be required to sign
- Contactless
- EMV transactions can also be performed with a contactless device that would transmit the payment information via NFC like a smartphone, contactless card or fob (such as ApplePay)
PCI vs EMV
EMV and
PCI are not mutually exclusive. While the liability shift has direct impact on all business throughout the US as does
PCI compliance,
EMV and
PCI compliance do not hinge upon one another.
PCI compliance is a standard set forth by the
PCI Security Standards Council™, and the specific requirements vary according to the type of business and individual operating practice. The
PCI Data Security Standard (PCI DSS) was developed to encourage and enhance cardholder data security and facilitate the broad adoption of data security measures. The
PCI DSS provides a baseline of technical and operational requirements designed to protect cardholder data. At the highest level
PCI DSS encompasses the following core activities:
- Build and maintain a secure network and systems
- Protect cardholder data
- Maintain a vulnerability management program
- Implement strong access control measures
- Regularly monitor and test networks
- Maintain an information security policy
Currently, the
EMV requirement does not impact the need for
PCI compliance, or vice versa.
EMV is coming, and as a retailer it’s imperative to explore your options and to be aware of the potential ramifications for lack of compliance. As details are still forthcoming on the
EMV rollout, please
contact us should you have any questions about
EMV and your
Retail Pro system using our exclusive partner,
Cayan.
became part of the household vernacular. Samsung and PayPal followed soon after with fingerprint authentication. Today, biometric technology can be integrated into banks, ATM machines, USB keys hooked onto computers, as well as POS systems. In addition, retailers are looking at the technology to help prevent loss due to ID theft. Biometrics are incorporated into fingerprint identification, as well as palm-vein readers and facial recognition solutions to offer a convenient and additional layer of security, help prevent fraud and provide a better customer experience. Biometrics can also offer retailers controlled access and accurate attendance records, leading to a more secure workplace environment. With system and hardware prices dropping and reliability and convenience going up, more retailers are using some form of the technology. Marius Coetzee from Ideco told BizTechAfrica that biometrics were critical for fast, accurate customer ID verification — which results in fast, accurate decision making: “Point Of Sale based biometric verification is a critical aspect to reducing losses caused by increasing levels of ID fraud. Once customer details are registered, you can trade with certainty at every point of transaction.” According to Research and Markets, the global market for biometrics is on track to post a strong CAGR of 19.6% between 2014 and 2020, reaching a projected $30.1 billion by 2020, up from roughly $10.3 billion in 2014. Fingerprint recognition is estimated to be the largest technology with market, valued at $3.2 billion in 2014 while Civil ID — the use of biometrics to identify or verify the identity of individuals when interacting with governments — will be the largest application with global market of $4.6 billion in the same year. Retailers will increase using biometrics in multiple combinations to ensure security in payments, but, eventually, the technology could eliminate the need to carry a payment card or even a smartphone by letting users authorize payments with a fingerprint alone.
