EMV stands for Europay, MasterCard, and Visa. These three companies came up with the standard used for authorizing smart cards.
Yes, the future of credit cards looks very “smart” here in the United States.
Credit cards have remained the same for a long time now. They look the same and are used the same as they always have been, at least here in the U.S. In most other countries, though, customers have been using smart cards or EMV cards for the last decade.
What is EMV and what does it mean for business owners?
It is essentially a set of rules for smart card authorizations. Smart cards use a small microchip embedded on the front of the card which communicates with smart card readers. When a customer uses an EMV card, the microchip connects to their financial institution through the payment terminal and the verification process takes place.
A consortium called EMVCo splits control of the standard between several different major credit card companies. Those include all the ones we are familiar with here in the United States (MasterCard, Visa, American Express, and Discover) as well as a few foreign credit card companies (JCB and China UnionPay).
There are also standards in place for authorizing transactions where the credit card is not present. So, for example, if a customer calls your business and wishes to purchase something over the phone, there is a certain set of rules which must be followed to authorize the transaction.
It is important for your business to be compliant with these rules if you do a lot of phone transactions. Make sure you’re aware of the rules for accepting “card not present” transactions because you don’t want to miss out on those sales!
This may all sound kind of boring and monotonous. But as you can see, it is important you understand what the standards are so your business is EMV compliant.
By the way, all businesses in the US are required to be EMV compliant as of October 1st, 2015.
Maybe you do a lot of business online with your customers. If you have an online store, your customers’ credit card companies have programs in place for secure transactions on the web. They each have their own names for these programs and although they use the same type of implementation, they each have their own set of default values.
Before credit card companies started switching to chip and PIN cards (or EMV smart cards) the method used for verifying a credit card with face-to-face transactions was through the magnetic stripe on the back of credit cards.
The magnetic stripe carries all the customer’s account information on it and it does not change from transaction to transaction. The problem with this method is the information on the magnetic stripe is not very secure and can easily be copied by criminals hoping to use it for fraudulent purchases.
It isn’t hard for criminals to purchase equipment they can then turn around and use to copy credit card information stored on the magnetic stripe.
With EMV cards, they can’t copy the customer’s information because the information stored can only be accessed by the person with the PIN number associated with the card. The microchip in the card encrypts their personal information so would-be criminals have a much harder time gaining access to it.
The United States is currently in the process of switching the traditional magnetic stripe cards your customers are using now to EMV standard smart cards. Every credit card carrier should have a new smart chip and PIN card within the next few years.
The biggest reason for the switch is because the added security of smart cards. They are simply safer and they keep your customer’s information more secure than magnetic stripe cards ever could.
As much as your customers want to purchase your products and services, it is more important to them to feel their personal information is safe and secure. If they don’t feel safe, they probably will not buy.
Recently, the security of credit card users has come under some major threats and it has made consumers especially concerned. Many people have experienced fraud and identity theft and the damage it causes can last for years.
EMV standards aim to eliminate this threat to your customer’s security through smart card implementation. It has already been proven successful in many European countries and hopefully we will see the same thing here in the United States.
It is vital for your customers to feel more secure when using their credit cards.
For more information, visit www.redfynn.com. Or call (888) 510-9871 for a free consultation.