emv terminals why do you need to upgrade in 2015
TRANSCRIPT
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EMV stands for Europay, MasterCard and Visa and is a global standard
for cards equipped with computer chips and the technology used to
authenticate chip-card transactions.
By October 2015, new liability
rules in the United States will
require restaurants and
merchants to make the switch
to terminals that handle EMV
cards. To prepare for the shift,
merchants must consider new
in-store technology and
internal processing systems.
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EMV chip cards are
manufactured with a small
integrated circuit, or chip,
inside the card. Data for each
payment is read from the chip
instead of the cards magnetic
stripe. During a transaction, an
EMV card is inserted into the
terminal for the duration of the
purchase to ensure the card is
valid. The card can be
removed when the transaction
is approved and complete.
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Instead of swiping the magnetic stripe on your card,
EMV cards are processed for payment in two fluid
steps: card reading, then transaction verification.
Chip cards are read by whats called card dipping,
or inserting your card into a terminal slot.
The dipping method takes slightly more time than
traditional card-swiping; however, EMV cards also
support contactless card reading. Consumers know
this method as tapping, as it asks them to tap or
hold their card against the terminal for chip reading
and payment. Merchants with significant foot traffic
may consider contactless card reading to keep the
checkout process quick.
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Using chips instead of magnetic stripes have the
potential to significantly decrease card fraud.
Chips are unique, making them difficult to
read and expensive to counterfeit.
Each time the chip is read, a unique
transaction code is generated that cannot be
used again, which prevents info from being
stolen and used over and over by criminals.
Some EMV cards also use a pin number for
added security (this depends on the
verification method tied to your EMV card, not
whether your card is debit or credit).
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In 2005, EMV cards became commonplace in the European Union,
followed shortly by Canada in 2012. Though chip cards are now popular in
the United States, they may be required for use by October 2015, with the
full switch happening by 2017. New liability laws will go into effect this fall.
The laws mandate that card-present fraud
liability will shift to whoever is the least EMV-
compliant party in a fraudulent transaction.
In many cases, this means the merchants
not following EMV protocol will be liable for
any counterfeit smart card transactions
since, theoretically, having the EMV terminal
could have prevented the fraud.
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October 1, 2015: Visa, MasterCard, American Express, and Discover
will enforce a liability shift for POS terminals.
October 1, 2016: MasterCard will launch a liability shift for ATM usage.
October 1, 2017: Visa, MasterCard, American Express, and Discover
plan to extend new liability shift laws for pay-at-pump gas stations. The
same will go for Visa and American Express payment at ATMs.
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Yes: starting in October 2015, the least-
EMV compliant party will be liable for any
counterfeit smart card transactions.
With new regulations in place, merchants
across the United States should review
their point-of-sale systems and any in-
store hardware and software.
Small businesses may be able to transition
quickly to EMV by simply adding a new
external pin pad.
Larger companies will need to plan and
budget for upgrading multiple systems with
individual terminals.
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With the liability shift coming in October 2015,
your business will need to be able to accept EMV.
Only the latest machines can read and process
the chips embedded in EMV cards. Leap
Payments offer a variety of payment processing
solutions including EMV countertop and wireless
machines to meet the needs of any merchant
environment. All Leap Payments machines also
support credit, debit, gift cards, electronic checks,
and all transactions types such as sale, void,
refund, tips, etc. perfect for any business.
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Leap Payments is dedicated to providing the best merchant credit card processing
services in the industry. It is their mission to provide open, honest, and transparent
payment solutions to help clients reduce their costs and get paid faster.
For more info, visit http://www.leappayments.com/ or call 800-993-6300.
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Sources
http://www.leappayments.com/emv-the-future-of-
card-technology/
http://www.merchantmaverick.com/really-need-emv-
chip-card-terminal/
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Summary
By October 2015, merchants must make the
shift to EMV terminals to avoid new liability
laws. This presentation includes an overview
of how EMV terminals work, and how to
make the switch, plus info on how Leap
Payments can help.