1. SAFETY MINUTE
EMV Chip Cards – What it Means to You!
Credit card fraud is an ongoing concern for both
small and large businesses. Recent data
security breaches at large retailers have
increased awareness of the problem and ignited
a debate on ways to prevent this type of crime.
Important Points
Businesses accepting credit cards will need to become educated on the use of chip
cards and make necessary hardware upgrades in order to continue to safely accept
this form of payment.
What is EMV Chip Card Technology?
EMV, which stands for Europay, MasterCard® and Visa®, chip technology has existed
since the 1990s. Cards using this technology gained popularity outside of the United
States and have been a factor in reduced fraud overseas, but haven't gained much
traction in the United States.
They work like this: EMV cards have a small chip embedded into the plastic. The chip
secures customers’ data better than the traditional magnetic stripe by generating a
unique, single-use transaction code with each payment.
In the event of a security breach at the point of sale, the data stolen from an EMV chip
would not be able to be used to make additional purchases, whereas the information
stolen from a magnetic stripe could be used many times by a hacker.
Approximately 575 million chip cards are expected to be issued to U.S. consumers by the
end of 2015. To assist with the transition, newly issued credit cards will still carry the
magnetic stripe in addition to the chip and will be functional in both the older swipe
terminals and the newer chip readers.
Prior to the new initiative, monetary losses resulting from fraudulent credit card use
were absorbed by credit card banks and payment processors, not the merchants. After
October 2015, however, merchants will accept some liability for fraud losses if they fail to
upgrade to chip card terminals, or if they do upgrade but continue to process chip cards
by swiping the magnetic stripes. http://www.paychex.com/articles/finance