Most recent and upcoming American credit cards feature a new form of security named EMV technology. EMV, which stands for “Europay, Mastercard, and Visa,” is believed to drastically affect how credit cards are used and perceived by both consumers and retailers.
Part of the reason this is such a big development is because almost half of the world’s credit card fraud occurs in the United States, despite having only a fourth of the world’s credit card transactions. The U.S. is a newcomer to the party, and here’s what you need to know.
Everywhere But the U.S. Already Uses It
Although one may assume that the U.S. is simply adopting new technology, the fact of the matter is that Europe has been using chip-based technology for years now. The U.S. is considered well behind the game in terms of still using magnetic strips on credit cards.
It Doesn’t Have to Cost a Lot to Implement
As a business owner, a natural concern is that accepting this new credit card technology as a form of payment will be difficult and expensive to implement.
Fortunately, there are options such as the Square contactless and chip reader, which accepts traditional cards, Apple Pay, and yes, EMV-chipped cards. It is available to some vendors for free for a limited time.
You May Be Liable
With traditional magnetic-based credit cards, the bank takes on fraudulent charges should they arise. With the new EMV chipped cards, in many cases the retailer takes full responsibility for the fraudulent purchases, particularly if they do not own a proper EMV machine. The credit card processing rules will go in effect in October 2015.
It is a seismic shift in regards to culpability and responsibility, and it has caused some controversy and uproar, amongst both analysts and those with merchant accounts.
Are Cards Still Swiped?
New chip-based cards will not be swiped, but rather inserted or “dipped” into the reader, They will be left in the device for longer than a traditional swipe takes.
It Is Not NFC
Although both EMV and NFC are more secure payment technologies, they differ in some significant respects. In broad strokes, NFC is a contactless payment method, while EMV still involves a physical card. In addition, NFC transactions are usually faster than EMV payments. Both are safe, however, and good options for merchant accounts.