What is EMV®?

Clover Flex EMV card reader processing a chip-enabled credit card

Since its introduction to the United States in 2011, EMV® has improved credit card security, reduced fraud, and allowed customers to use their cards abroad with greater convenience and confidence.

The Basics of EMV®

EMV (Europay, Mastercard, Visa) chip card transactions improve protection against fraud when compared to traditional magnetic stripe credit cards. EMV can be used for credit and debit card transactions and most recently, NFC mobile payments. Unlike its predecessors, EMV-enabled cards use a smart chip, instead of a magnetic stripe, to hold the data required to complete a purchase.

To reduce fraud, the U.S. began to migrate to EMV in 2011 to meet the liability shift deadline of October 2015. As of 2017, more than 855 million chip cards have been issued to U.S. consumers.1

How EMV Technology Works

An EMV chip’s ability to store more information than a magnetic stripe means that EMV-enabled cards can hold encrypted data, which helps protect against fraudulent use. Unlike magnetic-stripe cards, every time an EMV card is used for payment, the card’s chip creates a unique transaction code that cannot be used again. And so, now cardholders must “dip” their card into the reader. Additionally, EMV is widely accepted abroad, making purchasing much easier for cardholders while traveling.

Even with these advanced security features, counterfeit fraud is still a risk. In an effort to facilitate the adoption of EMV technology, fraud liability rules were altered back in 2015 by U.S. credit card issuers Mastercard, Visa, Discover, and American Express. After October 1, 2015, liability for in-store counterfeit fraud shifted to either the card issuer or the merchant that has yet to adopt chip technology. This can prove to be very expensive for a business that is not prepared to accept EMV-enabled credit cards.

Since the adoption of EMV technology, fraud has significantly dropped. For merchants who have completed the chip upgrade, counterfeit fraud dropped 80% in September 2018 as compared to September 2015.2

In April 2018, the four major U.S. credit card issuers (Visa, Mastercard, American Express, and Discover) decided they will no longer require signatures as verification for purchases.3 Retailers may still require signatures to verify a cardholder’s identity but, it will be at their discretion. This will ultimately help to streamline the checkout process without compromising credit card security as signatures are not considered a reliable security measure and cashiers rarely check the signature on the back of a credit card.

Solutions that tie to EMV

EMV payment options come in a variety of forms:

  • Contact EMV cards
  • Contactless EMV cards
  • Mobile EMV
  • Wearable EMV

What Does EMV Mean for Gas Stations?

The Gasoline Station industry is just one example of a business that is still in the process of adopting EMV technology. According to the National Association of Convenience Stores (NACS), it will cost the industry an estimated $4 billion to replace card readers, which, in some cases, necessitates completely replacing pumps, system hardware, and software at gas stations.4 The benefit is that card terminals will be more difficult to hack. It's a move that Visa and Mastercard expect to better protect consumers, companies, and financial institutions.

The fraud prevention movement should be paying attention to the growing pains gas stations are currently experiencing. Visa and Mastercard are requiring gas stations make the switch from magnetic strip card readers to EMV readers at pumps by October 2020. Gas station operators who don't meet the deadline may incur penalties, with liability for fraudulent charges transferring from financial institutions to station owners.

What Does EMV Mean for Merchants?

More than 3.1 million merchants are now accepting EMV chip cards and that number will only continue to increase.5 EMV can help dramatically reduce fraud, which means it will greatly reduce losses. As lawbreakers identify businesses that have already migrated to EMV, they will look to take advantage of merchants that haven't yet adopted EMV technology. This could be potentially devastating to any businesses still using magnetic strip cards as they will be held financially responsible for any fraud that occurs.

Why Do You Need EMV Credit Card Processing?

The need for EMV all comes down to a few key points:

  • Greater security
  • Reduced fraud
  • Reduced liability losses
  • Peace of mind for patrons that their data will stay secure
  • Flexibility for credit card users when traveling abroad

Should Customers Switch to an EMV Card?

In one word: absolutely. Just as EMV protects financial institutions and merchants, it protects customers. When a customer uses an EMV-enabled card or device at checkout it never leaves their person, reducing the possibility of fraud committed by an employee. The unique transaction code that EMV cards create also provides peace of mind, as it reduces the opportunities for fraud, and eliminates liability for the patron.

EMV Technology with First Data

First Data is all about technology, collaboration, and customer service. From helping a small business understand how mobile wallets can affect their bottom line to informing large financial institutions how to manage EMV credit card manufacturing, First Data is ready to handle the needs of any business.

Clover Go is perfect for anywhere your business goes. Accepting Apple Pay, Samsung Pay™, and Android Pay™ alongside contactless and EMV payments, means your customers are free to pay however they choose.

The Clover Station is a POS system that allows business owners to run their entire business all from one convenient device. Just like the Clover Go, the Clover Station is EMV-enabled and can also accept standard credit cards, debit cards, and contactless payment solutions. If barcode scanners or other peripherals are needed to run a successful business, that’s no problem, you can easily add them to your Clover Station.

Get information on how you can set up an EMV account with First Data if you are a Small Business, Large Business, or Financial Institution.

EMV is a registered trademark in the U.S. and other countries and an unregistered trademark elsewhere. The EMV trademark is owned by EMVCo, LLC.

1 “8 FAQs about EMV credit cards,” creditcards.com, 29 August 2017
2 “Chip technology helped reduce card-present counterfeit payment fraud by 80 percent,” Visa, December 2018
3 “Signature Optional!” Visa, 5 April 2018
4 “How EMV Technology Affects Financial Institutions,” SWBC, 22 March 2018
5 “Chip technology helped reduce card-present counterfeit payment fraud by 80 percent,” Visa, December 2018