EMV is a global standard for credit and debit card payments using chip technology that provides more security than magnetic stripe cards. By October 2015, merchants that cannot accept EMV chip cards may be liable for fraudulent transactions. To avoid this, merchants should implement EMV-enabled payment terminals or systems that can accept chip cards with or without a PIN. This requires evaluating costs and risks to decide whether upgrading existing payment systems is worthwhile. Resources are available to help merchants with the EMV implementation process.

1. Ann Arbor | Boston | Charlotte | Chicago | Denver | Elgin | Houston | Indianapolis | Kalamazoo | Los Angeles | Minneapolis | New York | Philadelphia
San Francisco | Seattle | Tampa | Abu Dhabi | Dubai
How Will EMV Affect Me
and What Should I Do?
Michigan Parking Association
July 30, 2015
Andrew J. Vidor

2. • What is EMV?
• Timeline for EMV implementation
• Are you liable?
• How does it work?
• What type of EMV is right for me?
• Should I implement EMV?
• How do I go about implementing it?
Questions that will be
Answered

3. • EMV - EuroPay MasterCard Visa, global standard for debit and credit
card payment using chip technology.
• Used since 1994 to significantly reduce fraudulent credit card
transactions.
What is EMV?

4. April 2013 Acquirer compliance to process EMV chip data
transactions
July 2015 EMV unattended terminal liability shift. Per Visa
“Effective 1 July 2015 all online-capable, chip
enabled unattended terminals must support the
processing of transactions without a cardholder
verification method (CVM).”
October 1, 2015 Fraud liability shift from credit card company to
merchant. Merchants that are EMV
compliant/capable will not be liable if a
fraudulent transaction occurs at their terminal.
EMV Timeline

5. Real Card is Issued Terminal Configuration Merchant Liable?
Mag-stripe Mag-stripe only No
Mag-stripe Chip enabled No
Chip Chip enabled No
Chip Mag-stripe only Yes
Are you Liable after October?

6. Multiple step verification process (series of “handshakes”)
1. Insert card with chip into/or “tap” contactless terminal
2. Dynamic cryptogram
3. Verification with acquirer host
4. Verification with issuer host
5. Cardholder verification method (CVM)
6. Transaction complete
How EMV Works

7. Insert card with chip into/or “tap” contactless terminal
Step 1- Present Card

8. Step 2 – Dynamic Cryptogram
Source: Visa, Visa Chip Business Toolkit

9. Acquirer Verification
The financial
institution or
merchant bank that
issued the card.
Examples
• Comerica Bank
• Chase
• PNC
• First National Bank
• Wells Fargo
Step 3 & 4 -Verification
Issuer Verification

10. Cardholder verification methods (CVM)
• Chip and signature
• Chip and pin
• Chip only
• Most US merchants will
begin by issuing chip
and signature cards.
Chip and pin cards will
likely be rolled out in
a few years.
Step 5 - Cardholder
Verification

11. Step 6 – Transaction Complete

12. • Cashiered transaction occurs any time there is a person present top
accept a card.
• “While it is required to support the processing of transactions without a
CVM, processing protocol, in accordance with EMV, should be
followed (i.e., if both the card and the terminal support PIN for point
of sale, a PIN may be requested).” –Visa U.S. Merchant EMV Chip
Acceptance Readiness Guidelines
• Provide a terminal that accepts chips.
If chip is entered, prompt for pin;
otherwise request signature.
• Provide terminal that is accessible from vehicle.
Cashiered Parking Transaction

13. • Unattended transactions include
– no cashier present
– pay-in-lane
– multi-space meter
– pay-on-foot
• “Effective 1 July 2015 all online-capable,
chip enabled unattended terminals must
support the processing of transactions
without CVM.” –Visa U.S. Merchant EMV
Chip Acceptance Readiness Guidelines
• No CVM required. But…
• If terminal/machine has a pin pad, then
pin pad must accept pin based CVM
transaction.
Unattended Parking
Transaction

14. • Learning curve
• Acceptance of technology
• Does customer have chip card?
• Forgotten pin
Customer Impact of EMV

15. • Ability to retrofit system
– Space availability for EMV equipment
– Processing system
• Cost of implementation & maintenance
• Staffing & customer service
• Equipment's ability to perform in extreme climates
• Transaction processing times
– Credit card processing time today, 3 seconds
– Additional EMV processing time, 7 seconds
• No fines for no implementing EMV, at this time.
Merchant Impact of EMV

16. Risk management considerations that need to be evaluated:
• Likelihood of fraudulent transaction?
• Dollar amount of transaction at risk?
• Ability to absorb the fraudulent transaction amount?
• Ability to retrofit EMV within existing system?
• Cost to convert to EMV?
– Retrofit vs. deployment of new system?
• Public relations recourse if fraudulent transaction were to occur?
Should I Implement EMV?

17. 1. Decide if you want to implement EMV.
2. Decide in what fashion you want to implement EMV
a) System wide
b) Only at specific locations
c) Full pin system
3. Talk with acquirer or card processor about implementing EMV.
4. Talk with equipment suppliers about ability to retrofit existing
equipment.
5. Consider new PARCS systems as an alternative to retrofit if existing
equipment is out of date or nearing end of useful life.
Implementation Steps

18. Visa Chip Business Toolkit
• http://usa.visa.com/merchants/grow-your-business/payment-
technologies/credit-card-chip/resources/merchant-
toolkit/index.jsp?page=toc
• http://www.gochipcard.com/
• http://www.emv-connection.com/get-the-facts-about-chip-cards-at-
gochipcard-com/
Resources