What is EMV compliance?
Credit cards never looked as “smart” as they do lately. At least in the United States, where we are all accustomed to the traditional magnetic stripe cards we have used for years.
There hasn’t been a major change to them in a long time. Credit cards look the same and have been used the same way for years.
In other countries, they’ve looked a little different for years, and the way they are used is different than here in the US, too. Every other major market besides the US uses smart cards and has for the last decade.
So what does this have to do with EMV compliance and why do you need to know about it?
These smart cards have a certain set of rules the major credit card companies came up with to make financial transactions and data more secure. This new set of rules and functionality is used for authorization and verification purposes.
How EMV cards look
Smart cards have a small microchip which can be seen embedded on the front of the card. Everything else about the cards is the same, for the most part.
In Europe, smart cards only need the microchip for verification and don’t have magnetic stripes on them. In the U.S. we still have the magnetic stripe plus the new microchip built in.
Companies have to abide by the EMV rules when authorizing smart cards which means the first thing they need is a smart card reader.
In essence, the ability to accept EMV chip cards means your business is EMV compliant.
Let’s do some details, though…
The readers have a slot on the front of the terminal where the customer inserts his/her card when purchasing goods.
The card’s microchip communicates with the reader and the authentication and verification of the card is performed.
For terminals which don’t have these readers, the smart cards here in the United States still have the magnetic stripe which can be swiped the traditional way.
This backwards compatibility will soon be a thing of the past though and retailers and companies all over the country will need a chip card reader to accept credit card payments.
Now, since October 1st, 2015, if your business doesn’t accept smart cards and someone pays with a stolen or fraudulent smart card, you — not the bank — have to pay for the damages.
It pays to be compliant! (Wink.)
The first thing to do is assess your point of sale terminal situation. You might need to do a hardware or software update, or you may have to update both.
Depending on the type of business you run, the results will be different. For “mom and pop” type businesses, your bank or financial institution should provide you with EMV compliant chip card terminals.
You should also talk to your credit card acquirer, processor, bank and any other relevant stakeholder to find out what hardware changes you need to make. They will be able to give you a proper assessment of your system and let you know what changes you need to make.
The change to EMV ready equipment, and thus EMV compliance, can be an opportunity to reconsider your current payment system.
Maybe you would like to upgrade to a system which allows you to use a smartphone or tablet for accepting payments. Or maybe you would like a more robust system which has advanced data analytics to make your business more efficient and stop money leakage.
Whatever you choose, you need to be able to take those smart cards! They’re increasingly present…
Some smart cards have contactless technology built into them for payment systems like Apple Pay. All your customer has to do is “tap” their card on the terminal and it authorizes the transaction wirelessly.
Staying ahead of the game is the way to go. This is a great way to make sure your business is ahead of the changes.
Something to always keep in mind is security. Although it’s been proven EMV standards significantly reduce security threats, it isn’t a “cure-all.”
One of the biggest threats still out there and being seen even in other countries is online fraud. EMV standards don’t fully protect customers from online fraud.
Even though there has been a significant drop in security threats, they still exist, so be aware and don’t assume smart cards are the ultimate tool to combat threats to security breaches.
They definitely help, and the more work is done on improving EMV technology, the better protected we will all be.
The last thing you need to do is make sure your employees are educated on how to conduct EMV card transactions. They need to know how it works in order to help your customers through the transaction.
It’s very simple. Instead of a swipe, it’s a “dip.” Make sure your check-out employees know to tell your customers how to dip their card in the reader and either enter their PIN or sign, depending on the type of transaction.
I would recommend having at least one training meeting with all your employees so they are all properly trained on smart card transactions and EMV compliance.
The more you know!
If you have any questions at all about the EMV financial changes, give us a buzz at (888) 510-9871, or visit www.redfynn.com. We’re happy to help. And we have bundle package solutions starting as low as $1.28/day.