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What are EMV Chip Cards and What You Should Know About Them.

EMV or Chip Cards has been in the news a lot lately since the Target Store breach was reported. What are EMV/Chip cards?

Chip Cards are Credit and Debit cards with a micro computer chip embedded in their plastic. EMV is an acronym for Europe, MasterCard, Visa which established the global standard for these types of cards.

Why are they getting attention now?

Chip cards are a way to improve security, reduce fraud, and provide value-added products in the future. They have been deployed in about every country in the world and are now being issued in the United States.

How do they improve cardholder security?

The micro computer chip can store information and perform a validation that is more secure than the magnetic stripe on the back of the card. Chip technology is more effective in combating counterfeit fraud than the magnetic stripe technology.

Would this level of security have prevented the Target Breach?

The Target breach investigation is ongoing. We will not know for sure until it is complete. Preliminary reports have suggested it would not have prevented it.

When will my customers start using them to purchase my goods or services?

As stated previously, Chip cards have been issued all around the globe, so if you have international customers you may have already been presented with a chip card. Issuers in the United States have started issuing these cards, but it might take quite some time before we will see them in the hands of many consumers.

Can I accept a chip card for payment today?

Yes, almost all chip cards issued today and in the near future will also have a magnetic stripe on the card as well. This is to help everyone transition hardware and software over time to support the reading of the micro chip at the point of sale.

What should I do if someone presents a chip card to me for payment?

There are two things that you will need to read a chip card at the point of sale. You will need a hardware ready EMV/chip card reader and you will need EMV/chip card software. Many payment processors have been selling EMV/chip card ready hardware for years preparing for this transition. We are now in the process of certifying software that can read and process the chip for these hardware capable terminals.

The best practices for accepting EMV/chip cards are:
Insert the card into a hardware capable terminal if you have one, and follow the instructions on the terminal screen. You may be instructed to allow your customer to enter a PIN number. However, not every EMV/chip card will require a PIN number so it is important that you follow the instructions on the screen.
If you do not see instruction upon entering the chip card into the terminal or you do not have a hardware capable terminal, run the card through the terminal using the traditional magnetic stripe. Again, follow the instructions on the terminal screen.
Finally, if neither the chip card reader nor the magnetic stripe reader successfully initiates a transaction, follow your fall back instructions for hand keying the transaction to complete the sale.

Why do I have hardware ready terminals but no EMV/chip card ready software?

The complexities and security requirements of EMV are significantly different than magnetic stripe requirements and take a much longer time to integrate and certify through the existing payment processing infrastructure. Processors and hardware providers are working hard on these software certifications and it is anticipated that throughout 2014 and 2015 we will be releasing certified software to meet the increased need to support chip card carrying consumers.

Why can a merchant down the street support chip cards and I cannot?

As mentioned before, every U.S. payment processor is working hard to certify EMV capable software. There are many terminals that need this software and each payment processor must certify each hardware/software combination end to end. This takes time and coordination of multiple systems. You will see hardware software combinations being certified at various times over the next few years.We will keep you updated as they become available.

Am I required to support EMV/chip cards?

Supporting EMV by having hardware and software capable terminals is not a mandate at this time. That is why, for some period of time most chip capable cards will also contain a magnetic stripe. However, you will want to consider that you may be putting yourself at risk in the future as fraud will migrate to the weakest technology (magnetic stripe) as more and more consumers and merchants become EMV/chip card capable. Also, Visa and MasterCard are planning on shifting the liability of card present fraud from issuers to merchants in October 2015 as an incentive for the card issuers and merchant to get on board with processing EMV/chip cards.

How can a get more information?

Call your Wind River Financial representative today at (800) 704-7253

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