The recent surge of large scale data breaches worldwide has ushered the global migration to EMV cards. EMV stands for Europay, Mastercard and Visa, and more importantly, it’s the talk at every register in the nation. That’s right, we are talking about The Chip. You’re probably wondering what it is, why it’s everywhere, why did the powers that be force me to engage in ten more seconds of small talk at the counter, etc. Good news, I’m going to answer all of those questions and more.


So what exactly is this new technology?

Simply put, EMV is a dynamic data solution to the static magnetic strip on traditional cards. The idea is that every transaction is done with unique information. Every time you insert the card, it generates a new set of data to perform the transaction. So while the data can still be stolen, it cannot be used more than once to make transactions.


Why is this payment processing migration happening?

Security. As stated above, the change to EMV was brought about as a response to worldwide data breaches, with the end goal being to cut down on fraud. The major card companies had set a 2017 deadline to make the complete migration to EMV, but the transfer is still in progress.


Are criminals deterred by EMV?

Yes. Already, data shows that criminals are moving away from targeting countries that have adopted EMV nationwide. Additionally, counterfeit rates have dropped in the United States significantly since the beginning of the adoption. Both Mastercard and Visa reported drops in counterfeit of 54% and 52% respectively. On the other side of the coin, Mastercard reported a year-to-year increase of 77% in fraud among merchants who had yet to make the switch.


Who is liable with EMV?

Traditionally, the loss from card-present fraud falls on the payment processor or issuing bank. With EMV, the liability now falls upon the least EMV-compliant party. What exactly does that mean? Consider the following. Let’s say a financial institution issues an EMV card. The chip card is used at a merchant that has not changed its payment system to accompany chip cards. In this case, the merchant eats the cost of the fraud. For this reason, the entire merchant industry is being encouraged to adopt the new system in order to avoid the potentially damaging costs of a data breach.

All in all, the shift to EMV is one that greatly benefits both businesses and consumers. The added security gives peace of mind to both parties, as well as reducing the overall chance of fraud. EMV technology is the way to a safer world. All things considered, that’s not too shabby for a few extra seconds of small talk at the register.

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Electronic Merchant Systems is a registered ISO/MSP for BMO Harris Bank, NA, Schaumburg, Illinois, Esquire Bank, Jericho, NY, Merrick Bank, South Jordan, UT, and Chesapeake Bank, Kilmarnock, VA.