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No, we are not talking French onion dip here. We are talking about the massive switch that is happening throughout the United States for point-of-sale (POS) operations.

So what is EMV all about?

Long used outside the U.S., EMV (which stands for Europay, MasterCard and Visa) is a global payment system that utilizes a microprocessor chip embedded into debit and credit cards, making them less vulnerable to fraud for in-person transactions. Also known as Smart Cards, chip-and-PIN, chip-and-signature, or generally as chip technology, EMV is one of many recent advancements in the global initiative to combat fraud and protect sensitive payment data.

Why is it better?

Traditional magnetic strip cards contain the personal and card information within the magnetic strip. That same data is transferred to any merchant to complete a transaction, leaving the consumer susceptible to criminals using the barely detectable skimmer readers.

A chip-embedded EMV card, when “dipped” into the card slot on the POS device, will generate transaction-specific data through a process called Dynamic Authentication. Every time that card is used, a new, unique number is created when the chip-embedded info combines with the card reader, thus adding a layer of security against fraud that is virtually impossible to access.

Don’t swipe, insert!

Yes, that common phrase “swipe your card”, synonymous with using a traditional magnetic strip card, is no more. The swiping motion will ultimately cease to exist with the adoption of EMV technology (I’ll note that it will take a few years or more for it to be completely obsolete).

This might freak some people out.

Have you been in line at a retailer already equipped with an EMV terminal and watched the clerk try to instruct the customer how to pay? Well, if you haven’t, get ready for it. It will be funny once, then likely annoying for a while.

“You can’t swipe anymore.”

“What do I do then?”

“Turn your card sideways and insert it into the bottom of the terminal.”

“What?”

“Stick the card in – on its side.”

“Hmm. OK.”

—waiting — waiting — waiting

“Is it working?”

“I think so?”

“You sure?”

“Sort of.”

“OK enter your PIN.”

“My PIN? I don’t sign?”

“I guess not. Put your PIN in.”

“Um, what is my PIN? Hmm. OK try that.”

— beep —

“Phew…it worked.”

“Have a nice day!”

It’s definitely a dramatic shift in the act of credit card paying – a behavior that has been in place since the advent of the credit card in the 1970s. The financial institution that provides your card will determine if you need to enter a PIN instead of a signature – another drastic change for credit transactions.

So is it doomsday?

As of October 1, 2015, fraud liability will switch from the financial institutions to the business accepting the payment card if the business does not accept EMV-enabled card transactions.

This is significant. If a breach of some sort occurs at your business, you’re on the hook, not the bank.

In addition to being held liable for fraudulent activity, one could foresee businesses potentially losing customers due to a lack of confidence in the security they offer (think of the recent breaches at major retailers like Target, Home Depot, etc.).

Also, in order to be EMV compliant, businesses that accept credit cards as a form of payment will incur a cost (in some cases substantial) to upgrade their equipment. Be sure to speak to your bank or merchant services provider for information on what to do.

It’s definitely not the end of the world, but it’s a change we’ll have to get used to.

Theresa Siconolfi
Production Manager