Now, it’s time for US customers to get the advantage of EMV credit and debit cards. All major credit card brands in the U.S. will be introducing a shift in fraud liability to inspire merchants to comply with the new standard. By October of this year, physical retailers who are not ready to accept EMV cards may be responsible for financial losses because of card fraud.
Let me tell you what EMV is all about and how it becoming compliant with the new standard.
What is EMV?
EMV is a fraud-reducing technology that can assist in protecting merchants, consumers and issuers against losses from the use of fake and stolen or lost payment cards at the point-of-sale.
A microprocessor or smart chip is inserted with EMV cards that help in interacting with the merchant’s point-of-sale device to ensure that the payment card is valid and with the use of a PIN that it belongs to the person using the card.
This type of chip technology adds security layers against fraud and is almost difficult to duplicate. At the time of the transaction- when the cardholder is most inclined to fraud- an EMV cryptogram is what keeps private or confidential data away from cyber-thieves.
Why is this change happening?
Though the U.S. accounts for only 24% of the world’s credit card transactions, it’s accountable for just about 50% of the world’s credit card fraud. EMV chip cards are being rolled out to enhance payment security and make it tough for fraudsters to forged cards.
By 2011, EMV technology had brought some methods of card fraud in Britain to their lowest level in 2 decades. In Canada, the introduction of EMV reduced losses from debit card fraud by over 72%.
The introduction of EMV in the U.S. is essential to reduce card fraud losses, combat fraudsters and provide a safer shopping experience for American consumers.
How do EMV chip cards work?
Nothing like current magnetic-stripe cards that are swiped, EMV chip cards are either inserted into or tapped against, EMV-compatible card readers. To complete the transaction, there are three possible ways after the EMV chip card is inserted or tapped. The three ways are:-
Chip & PIN
For operating these cards, the cardholder has to enter a personal identification number (PIN). It’s essential that retailers can support this verification method as some chip cards being issued in the US will be PIN capable.
Chip & Signature
This method still takes advantage of the boosted security that EMV offers by preventing cards from being replicated, but for this cardholder have to verify the transaction with a signature, similar to current magnetic-stripe cards. This will be the most common form of EMV chip card issued in the early period of the transition.
Data between a payment terminal and chip card is swapped wirelessly when the two come into contact. In most cases, the customer will be needed to provide no verification for smaller transactions. New forms of mobile payments like Apple Pay will also work this way.