Your EMV Credit Card Questions Answered

Q: What is EMV?

A: EMV stands for Europay, MasterCard, Visa and is the international credit card standard for integrated circuit cards (IC Cards) more commonly known as “Chip” or “Chip and Pin” cards. Visa Inc. and MasterCard have recently announced plans to accelerate chip migration in the United States by April 2013, including both EMV and NFC (contactless) technology.

Q: What are “chip” cards?

A: Unlike the mag stripe cards, the electronic “chip” will be located on the front of the payment card. However, during transition most cards will include both mag stripe and chip options. To insure that EMV capable cards are used wherever possible, a service code is embedded in the mag stripe that will prompt the user at the point-of-sale to insert the chip card.

Q: How many “chip” cards are there?

A: As of Q4 2011 there were more than 1.5 Billion EMV compliant chip based payment cards in use worldwide. Visa reported that US financial institutions issued an estimated one million Visa branded EMV chip cards by the end of 2011.

Q: Which merchants accept “chip” cards?

A: Today only 4.5% of US card present transactions originate by “chip ready” EMV terminals with an estimated 70% of terminals projected to be EMV ready prior to October 1, 2015 when the liability shift occurs.

Q: What is the Liability Shift?

A: Only merchants who accept payments via terminals that meet the EMV standards can reduce the risk of fraud associated with lost or stolen cards. With this liability shift, the party that is the cause of the “chip” transaction not occurring will be financially liable for any resulting card-present counterfeit fraud losses and higher rates and fees. And, as an incentive to merchants, as of October 1, 2012 if greater than 75% of a retailer’s payment transactions occur on dual interface capable terminals, Visa will remove requirements for PCI-DSS recertification.

Q: What can merchants do to prepare for EMV?

A: Regal Payment Systems will help merchants prepare by providing EMV ready solutions that will reduce risk and liability while securing their profits.