By October 2015, the Payment Card Industry (PCI) has a deadline that all merchants should be able to accept EMV payment cards or face charge backs and bad transaction fees. So what is EMV?
EMV stands for Europay, Mastercard and Visa, a global standard utilizing an integrated circuit embedded within a plastic payment card (Chip). EMV has been the payment standard in Europe since 2002. The combination of the card (Chip) with a PIN number provides a strong level of protection for the consumer against identity theft.
So how will this technology effect your business or your pocket book. Let’s exam a few Frequently Asked Questions:
- If I don’t make the October 15th date will I go to prison or face fines? No, EMV is not a law, requirement, or a mandate. The only penalty imposed will be a charge back if you the merchant accept a fraudulent EMV capable credit card without using the EMV reader. So if you accept an EMV capable card for $25.00 and the EMV card is found to be fraudulent days later, you will lose that money plus pay a $20.00 bad card fee total loss would be $45.00. This is the shifting of liability the payment card industry is talking about.
- Don’t I have to do EMV to be PCI compliant? EMV is only one component of PCI protection but it is not mandated because it does not stop Cybercriminals from hacking your system and stealing your customer’s sensitive data. It merely reduces the threat of someone recreating a fraudulent credit card. EMV will not reduce your cost of PCI compliance.
- If I don’t have an EMV reader, I won’t be able to accept Chip embedded cards? Not true. Only 20-30% of card holders in the US will even possess a chip card by October 15th and if they do all of them still have the magnetic stripe to be used in the event the merchant cannot read the card. Most industry experts anticipate a 3-5 year adoption rate to move completely away from the traditional Magnetic stripe card.
- So, all I have to do is purchase a device to read the EMV card and my restaurant is ready to go? Not True. Not all EMV devices may be compatible with your POS system. So, your first step should be to contact your POS provider. They will be able to tell you the devices and processor’s they are compatible too. If you do not know your POS provider then contact your credit card processor they will be able to recommend a solution for your business.
- How great is my risk if I don’t make the deadline? The risk you face is an individual decision. The main basis is you will be responsible for the amount charged in your restaurant on the fraudulent card plus you will pay a bad card fee. If your average check is $100.00 you are at greater risk than restaurants with a $15.00 Average check. You have to decide on your own.
Currently there is a lot of confusion surrounding EMV. If you would like to speak with an RDS representative about EMV, please fill out the form on this page.