EMV (or “chip-and-pin”) credit and debit cards are now making their way to U.S. consumers.
To encourage merchants to comply with the new standard, all major credit card brands in the U.S. will beinstituting a shift in fraud liability. By October of this year, physical retailers who aren’t ready to accept EMV cards may be liable for financial losses as a result of card fraud.
Here’s what you need to know aboutEMVand becoming compliant with the new standard.
What is EMV?
EMV is a payment card standard created by (and named after) Europay, MasterCard, and Visa that promises to enhance security for physical credit and debit card payments.
As a merchant, employing EMV is a great way to prevent fraudsters from targeting your store. During a transaction, a small computer chip embedded in every EMV card securely communicates with the card issuer to verify and approve the charge. This added layer of security not only keeps customers safe, but businesses too.
Why is this change happening?
Though the U.S. accounts for only 24% of the world’scredit card transactions, it’s responsible fornearly 50% of the world’s credit card fraud. EMV chip cards are being rolled out to improve payment security and make it harder for fraudsters to counterfeit cards.
By 2011, EMV technology had brought some forms of card fraud in Britain to theirlowest level in two decades. In Canada, the introduction of EMV reduced losses from debit card fraudby over 72%.
The introduction of EMV in the U.S. is necessary to combat fraudsters, reduce card fraud losses, and provide a safer shopping experience for American consumers.
How do EMV chip cards work?
Unlike current magnetic-stripe cards that are swiped, EMV chip cards are either inserted into, or tapped against, EMV-compatiblecard readers. Once an EMV chip card is inserted or tapped, there are three possible ways in which to complete the transaction:
Chip & PIN
These cards require that the cardholder enter a personal identification number (PIN). Since some chip cards being issued in the US will be PIN capable, it’s important that retailers can support this verification method.
Chip & Signature
这种方法仍然需要增强的优势security that EMV offers by preventing cards from being duplicated, but requires the cardholder to verify the transaction with a signature, similar to existing magnetic-stripe cards. This will be the most common form of EMV chip card issued in the early period of the transition.
Tap (Contactless)
Data between chip card and a chip card and apayment terminalis exchanged wirelessly is exchanged wirelessly when the two come into contact. In most cases, the customer will be required to provide no verification for smaller transactions. New forms offorms ofmobile paymentslike Apple Pay will like Apple Pay will also work this way.
How will Shopify support the transition to EMV?
Read more about our new card reader and Liability Shift Protection Program