Apr 8, 2013

EMV Chip Technology, Secure Electronic Payments

The world of payments is evolving. We are starting to see an evolution from typical static magnetic stripes cards to more intelligent devices such as EMV chip cards and NFC mobile phones. Visa is paving the way to increase the security of mobile payments by quickening the migration to EMV contact and contactless chip technology in the US. The EMV technology will speed up adoption of mobile payments. This new chip technology has the added benefit of the ability to reduce use stolen payment card data. If data is compromised, a counterfeit card would be unusable without the presence of the card’s unique elements. Dynamic elements to transactions will make account data hard to steal or compromise, thus making merchant systems safer and more secure. Europay, Mastercard & Visa (EMV) sets the global standard for operation of chip cards, point-of-sale terminals, ATMS, etc. and starting in April of this year, MasterCard, Visa, American Express and Discover will require acquirers and service providers to have the capability to process any EMP transaction. This includes contact and contactless payments, such as use of credit card or mobile device respectively. All of this is in preparation of a liability shift that is set to occur in October2015. This shift in liability will hold that an issuer or merchant who does not support EMV will assume the liability for counterfeit card transactions. If a merchant has not adopted, at least, the contact chip terminals and a contact chip card is presented, liability for counterfeit fraud will shift to the merchant’s acquirer. This shifting liability strongly encourages chip adoption. As an added bonus, as of October 2012 – Visa’s Technology Innovation Program eliminated the requirement for eligible merchants to annually validate their compliance with PCI Data Security Standard if at least 75% of their Visa transactions originate from chip-enabled terminals (must support contact and contactless chip acceptance).