How EMV Impacts You
Although most merchants have heard the term EMV® by now, there are probably some questions on everyone's mind about this up-and-coming technology, starting with the name. EMV® is an acronym for Europay, MasterCard and Visa. With Discover and American Express now on board, the acronym has become a misnomer, but the name is here to stay and so is the technology.
EMV is a global standard for interoperable credit and debit payment cards, point-of-sale (POS) payment terminals and transaction processing networks based on chip card technology. It was conceived as a way to enhance the security of card transactions and to ensure that cards can be used at all merchant locations around the world.
Security for cardholders and merchants
The security of EMV transactions comes from the cardâ€™s microprocessor chip that can store information securely and perform cryptographic processing during a payment transaction. EMV cards carry security credentials, or keys, that are encoded by the card issuer and stored securely in the EMV cardâ€™s chip. They are impervious to access by criminals, thereby helping to prevent card skimming and cloning, the most common ways magnetic stripe cards are compromised and used for fraudulent activity. During an EMV transaction, the card is authenticated as being genuine and the cardholder is verified.
Interoperability for a global community
It has been said that the world is becoming smaller. While this isnâ€™t literally true in a physical sense, it is certainly true that what happens in one country affects people around the world. The U.S. is one of the last nations to adopt EMV technology, and American travelers have recently encountered difficulty using their cards at some EMV-capable merchant locations in foreign countries. Making EMV a global standard will ensure seamless transactions for merchants and consumers around the world.
What merchants need to know about EMV in 2013
There are two important EMV milestones this year. The first will occur April 1, by which time all merchant acquirers are required to support EMV terminal transactions. For merchants, this means if you are ready to accept EMV transactions, your acquirer is required to provide the equipment, software and training you need. The second EMV milestone comes on October 1, when merchants will be exempt from annual PCI Data Security Standard (PCI DSS) audits if they process at least 75% of their transactions on terminals that support both contact and contactless payments.
Planning an EMV migration strategy should be a priority for all merchants. While it will involve up-front costs, EMV is inevitable and should be figured into the cost of doing business. The Discover EMV Roadmap is aligned with those of the other card associations, and will include some more significant requirements from merchants in 2015. Merchants can visit discovernetwork.com/merchants and download Mosaic newsletter quarterly to stay up to date on the latest milestones in U.S. EMV migration.