EMV Payments 101

You may have noticed that your mailbox has had a steady stream of replacement credit and debit cards landing in it over the past year.  While banks generally only reissue cards after they are lost or stolen, or a few months before they expire, in this case, the culprit is something called EMV.  EMV stands for “Europay, MasterCard and Visa” -- the three companies that originally developed the technical standards for smart card processing. EMV was developed as a safer alternative to traditional magnetic stripe (magstripe) cards.

What makes a credit or debit card compatible with EMV?

If you look at an older credit card, you’ll see that it contains the aforementioned magnetic stripe on the back, which is “swiped” through a card reader at the POS (point of service) -- which includes those embedded in self-service kiosks -- to process a payment.

magnetic stripe credit card illustration
EMV cards (sometimes referred to as chip cards) on the other hand, store the card’s information on an integrated circuit on the front of the card. The information can then be read in two different ways -- via contact or contactless technology. “Contact” cards require that the card be inserted into a reader and that it remain there throughout the transaction; “contactless” (NFC) cards are able to be read via radio-frequency identification technology over short distances, i.e. the space between the customer and the individual assisting them with the transaction.

Why did the major shift in technology away from magstripe and toward "chip and pin?"

It primarily comes down to two factors -- enhanced security and better control of “offline” transaction approvals. This reduction in fraud is at the core of the “liability shift” that’s been the topic of much discussion for businesses both large and small.  Because the chip system supposedly offers much better security for card transactions, it has allowed banks and card issuers to “shift” the onus of responsibility for fraudulent payments over to the business at which the transaction was completed if it was made on non-EMV capable (magnetic stripe) systems, beginning in October of 2015. This new technology standard has meant that all businesses that accept credit cards have had to update, and often, entirely replace, their POS systems and kiosks with versions that are capable of reading these EMV-capable cards.


Now that we’ve covered the basics of EMV, next week, we’ll take a look at the available hardware and software options for those affected by the Great Liability Shift of 2015, with a particular focus on our specialty --  kiosk systems. REDYREF, a provider of vertically integrated kiosk solutions, is helping companies of all sizes navigate the complexities of the liability shift. Looking for assistance? Submit a request for proposal online or call (800) 628-3603 today for more information.

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