Is your payment system leaving your customers susceptible to fraud or costing you a fortune in chargebacks? Switching to EMV payments could potentially better protect you and your customers from unwanted losses. Whether or not you have made the switch, chances are good that you have heard of EMV payments, oftentimes referred to simply as “chip cards” or “chip and PIN”, without completely understanding what it is. So, what is it?
Here are six quick things restaurateurs need to know about EMV payments.
1. What Does EMV Stand for?
EMV stands for “Europay”, “Mastercard”, “Visa”, after the three companies that created this standard.
2. What are EMV Payments?
Simply put, EMV is a payment processing technology created to combat credit card fraud. It replaces the previous standard of credit cards with magnetic strips, or “magstripes”, that are easier to counterfeit and are confirmed by signatures that are easily forged.
3. How do EMV Payments Work?
Rather than the traditional swiping method, EMV chips require the card to be inserted into the terminal. Each time the card is inserted, a unique, one-time use code is communicated to the machine.
4. How are EMV Payments More Secure?
Since a unique code is created every transaction, even if someone managed to retrieve that information, it would be useless in any future transactions, preventing the success of card skimming and card cloning – the two most common methods of credit card fraud.
5. Can Customers Still Use the Magnetic Strip if I Don’t Upgrade?
According to Chase Payments EMV FAQ, “chip cards will still have a magnetic stripe during the U.S. migration to EMV to ensure that customers can continue to pay until all merchants have been given the time to upgrade their equipment”. But this wording seems to indicate that there may come a time that magstripe transactions will no longer be used at all.
6. Am I required to change to EMV?
Even though it is not required by law to switch to EMV payments, there was a chip liability shift beginning in October of 2015, making merchants without EMV liable for fraudulent transactions and chargebacks. For now, you benefit from making the change by decreasing fraud and eliminating liability for fraud, which may pay for the cost of changing to EMV.Here are six quick things restaurateurs need to know about EMV payments. Click To Tweet
This post is part of a series on EMV payments for restaurateurs.
Part 1: The Basics – 6 Quick Things Restaurateurs Need to Know About EMV Payments