Are You Ready for New Credit Card Processing Rules?

September 15, 2015

pic-creditcard-swipeThere’s an important deadline approaching and your business should be prepared. Oct. 1, 2015 is a date to mark on your calendar. That’s when businesses need to update their credit card terminals to accept EMV chip cards or they may assume financial responsibility if a data breach or counterfeit transaction occurs. NSBA’s partner for merchant processing, TransFirst, can help you understand what steps your business needs to take to get ready.

In addition to the detailed explanation of what’s happening below, TransFirst is holding an informative webinar this week, on Thursday, Sept. 17 at 12:00 EDT, to discuss what your business needs to do to be ready for the Oct. 1 EMV compatibility deadline. Click here to register for that webinar.

What is EMV?

EMV is the global standard for embedded-microprocessor chip technology used to authenticate credit and debit card transactions. Launched by EuroPay, MasterCard® and Visa® in the late 1990s and adopted by all the major card brands, EMV technology is currently in use worldwide and is being introduced in the U.S.

How does EMV protect the cardholder from fraud?

Have you received a new credit card equipped with the microprocessor chip? Wonder why your issuer sent you a new one? The little chip is part of your credit card issuer’s efforts to reduce in-person counterfeit credit and debit card fraud in the United States.

What’s the difference between EMV cards and the ones I now swipe at my business?

EMV’s increased security results from the microchip, which features other capabilities not available on the magnetic stripe-based cards that have been the standard in the U.S. The microchip securely stores information and encodes the data to help keep it safe from identity thieves.

How does EMV work?

The customer inserts or “dips” their EMV card into the card reader, which collects the account data embedded in the chip and processes the transaction. Once authorization is obtained from the processor, holders of chip-and-PIN cards complete the transaction.

Why is the U.S transitioning to EMV technology now?

The incidence of card-present fraud from counterfeiting and stolen cards has been drastically reduced in countries that use the more secure EMV technology. Unfortunately, that fraud has shifted to and grown in the U.S., and has become a driving factor of U.S. adoption. The move to EMV will also address the growing international card payment acceptance incompatibility between traditional magnetic stripe payment cards still used in the U.S. and the widespread EMV acceptance abroad.

What do NSBA members need to know about EMV compliance?

Currently, banks are responsible for any credit card fraud that may occur, but a point-of-sale (POS) counterfeit liability shift is set to occur on Oct. 1, 2015. At that time merchants who haven’t upgraded their POS credit card processing equipment to support EMV transactions will be responsible if a counterfeit or fraudulent transaction should occur on that card. Businesses that adopt EMV technology early will be ahead of the competition, both in processing EMV transactions and in protecting themselves and their customers from data breach and identity theft.

What exactly is a “liability shift”?

Your customers expect you to handle their credit cards in a safe and secure manner.  A big part of EMV compliance is the accompanying liability shift. Simply put, it means that merchants using non-EMV compliant devices or credit card machines who knowingly choose to accept transactions made with EMV-compliant cards (the ones with the chip) assume liability for any and all transactions that are found to be fraudulent.

What if I take credit cards over the phone?

Currently EMV terminals address the “card Present” environment.  If you are entering payments online, you would have to check with your payment processor to see if your credit card terminal online has EMV transactions enabled.

What does my business need to do to become EMV compliant?

Actually it’s easy! Simply check your current credit card terminal to see if it can accept EMV chip cards.  Most EMV terminals accept cards at the bottom or base of the terminal.  Unlike the magnetic stripe credit card machines that allow you to swipe the card, the EMV terminal will require that you “dip” the card into the machine earning its new nickname “chip and dip.”

Looks like I may need an EMV- compatible machine, what are my next steps?

Simply contact NSBA’s corporate sponsor and credit card processing partner TransFirst at 800-613-0148. NSBA members receive a $200 credit towards the purchase of a new EMV compatible terminal.