An up-and coming change that is happening more and more frequently to credit cards is the addition of a chip rather than the traditional strip, meaning that transactions are now being processed with a chip reader.

 

Rather than swiping when making a purchase, credit card holders are now able to insert their card into the chip reader, which many banks state gives increased benefits to the individual. When using a credit card with the traditional magnetic strip, the data needed to process the transaction stays the same. This means that if somebody steals the information of a traditional credit card, they are able to retain the information and data needed to make as many purchases as they desire, and they can even duplicate the card. However, with the new chip, every time a credit card is inserted for processing, a new transaction code is created. This means that if someone attempts to steal card information through a machine that works as a chip reader, they are unable to gain the important data needed to fully steal and duplicate the credit card, protecting a user’s security.

 

Another benefit of using a chip credit card, otherwise known as an EMV standard card, is the fact that processing transactions internationally becomes significantly smoother. While the United States is just now beginning to adopt the chip processing system, other regions overseas, such as Europe, had been utilizing this system for about ten years before it reached the U.S. Globally, approximately half of all cards used are chip cards, and nearly 75 percent of machine readers process chips. Other locations besides Europe that utilize the EMV standard card are Canada, Mexico, Australia, Asia, and Latin America. When a user makes the switch to a chip credit card, they can travel without the concern that their card will not be processed when inserted into a machine reader during their time abroad.

 

One additional step that chip credit card users can take in order to maximize the security of their transactions being processed is to require a PIN number when inserting the card into the reader rather than a signature. Signatures are easy to replicate and there is a significantly higher margin for error allowed when signing for a purchase or transaction than with a PIN, where the exact number must be known in order for the transaction to be processed.

 

If a user happens to stumble upon an older reader that does not allow for processing of chip credit cards, it should be noted that a vast majority of the EMV standard cards still do have the traditional magnetic strip, in order to allow for processing in every machine. However, when at all possible, the chip reader should be used to process a purchase or transaction rather than the magnetic strip, and if the magnetic strip must be used, it is preferable to input a PIN number rather than a signature in order to ensure that a customer’s experience is as secure as possible.

Preventing the growth of card-present fraudulent activity is one of the main reasons the industry moved towards EMV technology. Chip cards make it difficult for fraud organizations to target cardholders and businesses alike. As a result, more and more chip cards are being introduced by U.S. financial institutions in order to support and switch over to this technology.
Just like magnetic-stripe cards, EMV cards are processed for payment in two steps: card reading and transaction verification. However, with EMV cards you no longer have to master a quick, fluid card swipe in the right direction. Chip cards are read in a different way. Instead of going to a register and swiping your card, you are going to do what is called ‘card dipping’ instead, which means inserting your card into a terminal slot and waiting for it to process, when an EMV card is dipped, data flows between the card chip and the issuing financial institution to verify the card’s legitimacy and create the unique transaction data. This process isn’t as quick as a magnetic-stripe swipe because it will take a tiny bit longer for that transmission of data to happen, for example, If a person just sticks the card in and pulls it out, the transaction will likely be denied. A little bit of patience will be involved. While chip card transactions may take a bit longer than magnetic stripe transactions, total card processing time will vary between merchants and eventually speed up as this new payment environment is improved.
Given the migration challenges for implementing EMV in the petroleum environment, Visa’s and Mastercard’s modification of the liability shift dates will be beneficial to the retail petroleum industry and the U.S. chip migration, so for now, gas stations do not fall under the existing EMV fraud liability shift rules. ATMs still have two fraud liability shift dates: Mastercard’s that recently passed in October 2016 and Visa’s in October 2017. Until both dates pass, ATMs will follow existing fraud liability rulings.
You may begin to feel the pressure as regards the EMV card migration which is already reaching its critical mass with issuing banks beginning to issue chip cards to new and existing customers. Businesses that have not already migrated to EMV may consequently have to answer to their customers as to why they have to continue to swipe their new chip cards – especially when the market presents chip technology as the safer way to pay. Don’t wait until the last minute to migrate your business.

Before today, responsibilities for fraudulent purchases rest on the shoulder of credit card companies. For example, if a MasterCard number is stolen and used to buy $700 worth of clothes, MasterCard — not you and usually not the store would cover that cost. But as it is now, if stores don’t accept EMV payments, it’s up to them but the card company will not cover the cost of counterfeit fraud.

If stores accept EMV payments, credit card companies accept the liability for counterfeit fraud. That’s true even if the store accepts EMV payments, but also accepts magnetic stripe payments, and one of those magnetic stripe payments turns out to be fraudulent. The technical wording from Visa is, “The party that has made investment in EMV deployment is protected from financial liability for card-present counterfeit fraud losses on this date. If neither or both parties are EMV compliant, the fraud liability remains the same as it is today.”

Basically, the credit card companies have decided that magnetic stripe transactions are so vulnerable to counterfeit fraud that they don’t want to be responsible for that liability anymore, but they believe EMV is secure enough that they’re willing to be liable for its much more limited risk. For merchants and financial institutions, the switch to EMV means adding new in-store technology and internal processing systems, and complying with new liability rules. For consumers, it means activating new cards and learning new payment processes.

But of a truth, it means greater protection against counterfeit fraud. If a hacker stole the chip information from a sales point, typical card duplication would never work “because the stolen transaction number created in that instance wouldn’t be usable again and the card would just get denied. Basically, EMV technology will not prevent data breaches from occurring, but it will make it much harder for criminals to successfully profit from what they steal. The introduction of dynamic data is what makes EMV cards so effective at bringing down counterfeit card rates in other countries. Counterfeit fraud rates are already going down in the U.S. as a result of the adoption of EMV, according to Mastercard and Visa. In October 2016, chip-enabled merchants saw a 43 percent drop in counterfeit fraud compared to a year earlier, according to Visa. Similarly, Mastercard has recorded a 54 percent decrease in counterfeit fraud costs among its EMV-ready merchants from April 2015 to April 2016.

With all the benefits of EMV card well noted, then you do not need to be skeptical in joining the trend.

Presently, we are in the middle of a massive technological shift which is still unnoticed by some consumers. It is no more news that the debit and credit cards most individuals carry around in their wallets have being upgraded to a higher global standard known as EMV (Europay, MasterCard, Visa). These smart chips are unarguably the next line of defense against an ever-increasing threat facing many Americans – credit card fraud.
According to a report in 2012, over $11.3 billion was lost to payment-card fraud, in one year, about half of this, $5.3 billion happened in the United States. With major credit card breaches and counterfeiting occurring frequently, issuers had no choice than to take a critical look at ways of combating this trend, after a short while, they got an answer which was EMV. This technology has been so standard around the world for almost a decade. We have countries like France, Italy, North Korea and even United Kingdom, issuing smart chip-enabled credit cards for years. With the results gotten from the effectiveness of this technology, there is no denying that the added security of EMV is a massive improvement for the US.
The payment data on EMV cards is in constant flux. The smart chip on these cards is a small computer which makes it generates a unique identifier each time you pay with one of these cards and of course, it makes cards like this much more difficult to copy. And also, it has a lower susceptibility to “skimmers”.

Scammers are crafty and they do not need to steal your card physically in order to steal your information. Devices known as “skimmers” exploit the magnetic strips, by collecting the data but the good thing about EMV cards is that they require a pin to be entered whenever they are used to make a purchase – much like a debit card. This second layer of this authentication makes the technology far more secure, over traditional swipe & sign cards. In a scenario where a hacker manages to make a counterfeit copy of your credit card, he or she would still need to know your 4-digit PIN in order to actually use it to make card-present transactions.
Having noted all the benefits of the EMV card, then it’s time to join the chain by building value for your purchases and businesses through the power of satisfaction which will definitely bring consistency in producing superior results.

Under the previous system, a customer hands over their card to a sales clerk to pay for any transaction. At first, when credit cards were newly introduced, merchants used mechanical portable card imprinters that required carbon paper to make an imprint (rather than magnetic). There were no electronic communications with the card issuer, and the card never left the customer’s sight. The merchant had no choice than to verify transactions over a certain currency limit by telephoning the card issuer.

During the 1970s in the United States, so many merchants make subscriptions to a regularly-updated list of stolen or otherwise invalid credit cards numbers. This became a norm because these lists were commonly printed in booklet form on newsprint in a numerical order, much like a phone book, without any data aside from the list of invalid numbers. At this period, nothing else is expected from a checkout cashier than to thumb through this booklet each time a credit card is presented for payment of any amount, prior to approving the transaction, and this definitely brings a short delay.

Later, the card issuers were electronically contacted, using information from the magnetic stripe to verify the card and authorize the transaction. This was much faster than before, but still at a disadvantage because it required the transaction to occur in a fixed location. Consequently, if the transaction did not take place near a terminal (in a supermarket, for example) the clerk had to take the card away from the customer and to the card machine. It became so possible at any time for a dishonest employee to swipe the card secretly through a cheap machine that records the information on the card and stripe instantly; in fact, even at the terminal, a fraudster could swipe the customer’s card on a hidden reader. This made illegal cloning of cards very easy, and a more frequent occurrence than before.

Since the introduction of payment card Chip and PIN, however, cloning of the chip is no more feasible; only the magnetic stripe can be copied, and a copied card cannot be used by itself on a terminal requiring a PIN. The introduction of Chip and PIN coincided with wireless data transmission technology becoming inexpensive and widespread.

With this great advantage brought by the introduction of EMV cards, then it’s time for all business owners to have a re-think on it so as to meet the explicit and ever-changing payment needs in this dynamic new generation.

FAQs about EMV credit cards

Europay, Mastercard, and Visa or EMV is the global standard for credit cards equipped with the new smart chips. These smart chips are used to authenticate and encrypt all transactions. Because of large scale data breaches, increasing rates of counterfeit credit cards, US card issuers have been migrating this old technology to the new technology and help reduce the costs of fraud.

Improving payment security and making it more difficult for criminals to successfully counterfeit credit cards is the goal of all issuers. This switch to EMV means that adding new, in-store technology for the merchants, and activating new cards and the need to learn new payment processes for the consumers.

But most of all, the result is the protection for both the merchant and the consumer against counterfeit fraud.

Here are 4 frequently asked questions about your new EMV smart chip enabled credit card.

1. What is it that makes an EMV card more secure than my mag stripe card.
When you look at your new EMV card, you will notice a small metallic square on the bottom left of your card. That is the computer chip, the heart of the change and what sets it apart I the new generation of cards.

Magnetic Stripe cards are the traditional credit and debit card. These stripes all contain unchanging data. Whomever has access to this information, either legitimate or criminal, have the necessary data from the card and the cardholder to make purchases, counterfeit cards, or access ATM’s for real cash. That is why this information is prime for criminals and counterfeiters to access.
If someone has access and can copy a mag stripe, they can replicate the data repeatedly because it never changes. But:

Unlike the mag stripe card, every time an EMV card is used as a payment gateway, the smart chip creates a unique transaction code that is never replicated and cannot be used again.

Duplication of this information, if ever stolen by a hacker, would never work because this information could not be used again and the counterfeit card would just be declined. EMV technology cannot prevent hackers from stealing data, but it can make it much harder for the criminals to be able to profit from what they steal.

Counterfeit fraud rates, thanks to the adoption of the EMV smart chips, have increasingly been dropping according to both Mastercard and Visa. Reports show that U.S. merchants, in October 2016 saw a 43% decrease in counterfeit fraud compared to October the year prior. But conversely, Mastercard has seen a 77% increase in counterfeit fraud with those merchants who have not migrated to the new EMV terminals and technology.

2. How is an EMV card used to make a purchase

There are two steps to process an EMV card, just like the mag stripe card. Those processes are card reading and then transaction verification.
But the process with the EMV card does not include the familiar swipe, we have all become accustomed. Chip cards are read in completely different manner.
Dipping will become the norm for EMV card users. EMV enabled terminals have a slot below the keypad, where you insert, or dip the card. Data from your card then flows to the issuing financial institution to verify the card’s legitimacy, and will create the unique transaction data. At first this process was slower than a mag stripe, but recent software upgrades and terminal upgrades, have greatly increased the speed of the transactions now.

3. Is card dipping the only option?
EMV cards also have a contactless card reading called near field communication. Instead of dipping, EMV cards can be tapped against a terminal scanner that will pick up the card data from the embedded computer chip.
Dual interface cards are now in a push around the world to make it the standard. However it has not completely made its way to the United States yet. Special terminals and equipment must be in place for a consumer to be able to use this feature.
4. Will I still have to sign or enter a PIN for my card transaction?
This depends on the type of transaction, but you will need some type of verification method.
Debit cards will operate the same way you have been operating for years now. Chip and pin verification where you just punch in your pin number in lieu of your signature.
As with traditional credit cards, your signature will be required for verification on most transactions.
The transition from US cards to the new EMV cards will not be that difficult for the average American. As more merchants start to transition to the new EMV terminals and the transactions get faster, you will see an great drop in fraud and counterfeit transactions, saving the American public and business community billions of dollars in the future.

Visa Announces Updates in EMV

Visa has announced in their monthly EMV update, that merchants that are using the chip-enabled terminals now account for 46% of their entire U.S. in store payment volumes. Also, in a related announcement, Visa saw over 800 million chip-on-chip transactions last November. This is an increase of 359% year over year.

Because Visa is the largest US card network, these figures not only point to the rising EMV penetration across the Unites States, but these figures could also be construed as a benchmark for the progression of the US EMV complete migration across the entire industry.

These numbers point to the growing adoptions and buy-in from consumers and merchants alike:

• For Consumers: Visa’s 400 million issued chip cards in the United States, marks a 105% year over year increase. That figure represents roughly 47% of the company’s total US card volume. Consumers seem to be adjusting to the changes that chip cards bring. Dipping (the term used when a chip card is inserted into a chip enabled terminal) rather than swiping their card, has started to become the norm. A recent survey found that 35% of consumers now, believe that chip cards are now the safest way to pay. This is the highest percentage ever seen in this survey.
• For Merchants: Adoption of the EMV technology continues to be on the rise, even though it has started to slow. Numbers show an increase of 6% over the previous month and up over 25% over the last quarter. But those numbers still only represent just 38% of all US Store Fronts. As more small business warm to the idea of EMV and its benefits from fraud protection, these numbers will continue to rise. Gas stations, somewhere that cards are used regularly and locations that see high fraud have been given a 3 year extension which will continue to impact merchant upgrades.

That extension will have a big impact on the transaction safety in the US. As the EMV adoption continues to be slow going. In Q2 of 2016, it was reported that just 7% of overall United States transactions were chip on chip. But it is likely, as 2017 continues to get into swing, that these numbers will jump in overall EMV penetration. With this increase of EMV penetration, fraud numbers will continue to drop, and consumers and merchants will continue to have more protection from hackers and criminals.

Mastercard has announced recently that 80 percent of all of its U.S consumer credit cards are EMV chip enabled. This marks an 88 percent adoption rate since the adoption of the October 1, 2015 EMV liability shift in the United States.

Mastercard also stated that, across its U.S. network, there was an increase of 374 percent in chip terminal adoption since the October 1 adoption date. 1.7 million EMV chip active merchant locations make up this Mastercard network in the U.S.

The company has helped over 150 countries adopt EMV, and over and over again and again, the results are consistent, Mastercard sees major reductions in all credit card fraud. Because the U.S. is one of the most complex markets across the globe, great strides have been achieved in securing the payment ecosystem in a very short amount of time. It is very rewarding for Mastercard to see that merchants, issuers and consumers can be released from the threats of card fraud.

In terms of U.S. dollars and according to MasterCard’s top five EMV enabled merchants, they have seen a drop of over 60 percent in counterfeit fraud.

MasterCard, despite EMV adoptions increasing, has announced that it is going to work with other payment networks, acquirers, and processors on a standard to get transaction times moving faster. The core of these efforts are rooted in the recently announced M/chip Fast solution.

M/Chip Fast solution will allow a customer to dip (the term used to insert an EMV chipped card into EMV enabled terminals), into a terminal and it will replicate the speed of the transaction that happens with a magnetic stripe card transaction. The company also explains this solution is consistent now with the speed of transactions that are achieved across the globe. The only change needed is that the card authentication needs to happen in one step instead of two. This will allow the customer to remove their card from the EMV enabled terminal before the transaction is completed. With this new system, transactions can be completed in seconds now.

Because of this new, faster, technology program, Mastercard is reporting that thousands of merchants are finally implementing the EMV technology across the United States. This solution has finally replicated the speed of the mag stripe transaction, with merchants finally having their last objection to the switch taken away.

EMV is living up to all its promises in the fight against credit card fraud in the United States.  Actually, creditcards.com reports that the chip-enabled merchants US wide have reported a 47% downswing in counterfeit fraud annually.  This is according to statistics that were released by Visa.

 

On that same note, Mastercard merchants network has reported a 54% decrease annually in counterfeit card fraud.  On the other side, merchants, who were not compliant with the new EMV policies and security have seen a counterfeit fraud rise of over 77% over the last year.

 

Question arise if both cardholders and merchants are embracing the EMV technology, then why are we still able to mag stripe swipe transactions across the country.

 

This paradigm is about the change.

You do not want to be the last holdout to using EMV enabled terminals in your business.

Based on the ATMIA 2016 ATM channel EMV Readiness survey, almost 90% of US ATM owners are upgrading their hardware and software analysis, and have made the purchases that upgrade or replace ATM’s that are EMV compliant.

At the end of 2016, the ATMIA survey says that up to 60% of nationwide ATM’s will be EMV compliant and that figure will rise to almost 80% by the end of 2017.

You need to contact your ATM vendor if your credit union is not reflected in these percentages and ask them to get started with the upgrade.

The sooner the better, as MasterCard’s EMV liability shift for ATM’s went into effect this last October and Visa’s is set for October 2017.

If your ATM’s are not compliant with these mandates, you WILL be liable for any fraud that occurs when an EMV card is inserted  And, as EMV becomes more commonplace at ATM’s, machines without its protection will be even more targeted for card skimming.

Credit Unions are lagging slightly behind their megabank counterparts in upgrading their ATM’s, according to the ATMIA, right now.

Larger banks tend to be given priority with the vendors due to the sheer size of their budgets and numbers of ATMs in their fleets. Also, many larger banks, are deep with resources that they can tap. This also makes them much less dependent on their vendors as well.

Even though an ATM machines is enabled and protected from card skimming, ATMIA says, Credit Card fraud is not going away in the near future. As has always been the case, Criminals are already changing their efforts to Card-not-present fraud. This means a switch to mobile and online transactions.  Education can help your customers to stay safe in the online world and teach the latest security practices.

Changing passwords and usernames across your network, and being very careful about providing personal data to businesses you do not recognize are several steps you can take to protect your business.

Credit card processors are the devices which are used to carry out the transactions. It is the best means to transfer your money to any account you want. So it can be described as the free flow of transactions between the accounts. As all the institutions whether they are banks or any private ownership all provide either the debit cards or the credit cards to their customers. So it can be used to make a cashless transaction. They can be used any number of times as there is no restriction on their usage.

People have been using credit cards on a regular basis for quite a few years now. The advantages of using plastic money are myriad. One does not have to carry too much cash all the time. One does not have to worry about getting waylaid even if one intends to make a purchase involving a lot of money.

If you are a merchant you must have realized long ago that you will lose out on a lot of business if you do not have provisions for accepting plastic money. Earlier only larger merchants were expected to have this facility. However, these days even smaller business houses are installing credit card machines and this means that your customers may go to your competitors if they find it more convenient to deal with them.

Some people believe that it takes a lot of resources to install credit card processors. This is only partially true. While it may be somewhat expensive to have these installed by the larger banks, more economical options are available these days. These organizations charge far less than the bigger banks. It is often not profitable to have the credit card processors of the banks installed if your scale of operations is not large. However, this is not a big problem with the other service providers because their fees are structured in such a way that it is profitable to use them even when the number of transactions is not too high.

To make things easier for smaller businesses, some service providers are willing to even provide the credit card processors for free. If you can find the right service provider, you will also be able to find the few that provide wireless processors that are remarkably easy to install.

Another advantage of appointing these service providers is that they are willing to quickly process the applications of people who wish to appoint them. Larger organizations are usually willing to provide services to merchants who fulfill a large number of conditions. For many merchants, it is not possible to fulfill all these conditions. These merchants are less likely to be disappointed if they contact the smaller firms that provide this service.

The success or failure of your online business depends on a great deal on the efficiency of your credit card processor. Timely payments, no undue deductions, reasonable charges, etc. go a long way to help you maintain a healthy inflow of capital. Thus, you need to look for companies with well-established track records and solid reputations. This is the best way to avoid scam artists trying to take advantage of the explosion of e-commerce.

If more people have already realized that credit card processors can do wonders for the business, then it may then be well worth a try to engage on their services.