To "chip" or not to "chip". That is the EMV Question.

November 7, 2016

No, EMV is not yet another disease you need a vaccination for. It doesn't affect your health, but it can affect your business. Get ready for some straight forward and simplified information that will let you know if you should or should not be concerned about the EMV/chip card monster.


First, The Quick Facts


EMV stands for Europay, MasterCard, and Visa, the three companies that originally created the standard. The  standard in now managed by EMVCo, a consortium with control split equally among Visa, MasterCard, JCB, American Express, China UnionPay, and Discover. EMV cards are also called "Chip" cards or "Chip and Pin" cards. They're easily identifiable by the computer chip looking thingy on the face of the card. (Yes, 'thingy' is the technical term for it... OK, maybe not.)


So what does EMV mean to the consumer?

EMV Cards are manufactured with a small integrated circuit within the card. Instead of the magnetic strip, payment information is read from this "chip". This helps prevent against fraud because the chip is much harder and more expensive to counterfeit. In addition, the way the information is transmitted changes each time the card is read. For these two reasons, it's much less likely that a thief will be able to steal or duplicate the card information. Thus, although not a complete guarantee, the "chip" cards are "safer" for the consumer. 



What does EMV mean to the merchant?

Not all existing credit card processing equipment will be able to read the new EMV "chip". But don't worry, as of now, all EMV cards have a magnetic strip back up. So no matter how old your equipment, you will still be able to accept any credit card, with or without the chip. The biggest impact on the merchant comes in the way of a "liability shift". 


Let's say a customer presents you with and EMV "chip" card for payment and you don't have equipment to read the chip. As explained earlier, you will still be able to process the card using the magnetic stripe, but the difference is if the card turns out to be fraudulent, you, the merchant, will be liable for the purchase amount and any costs associated with the fraud. Whereas in the past, fraudulent transactions like these were covered by the card issuer, Visa, MasterCard, etc.


Do I really need to get a EMV card reader?

First, it should be noted that the credit card processing industry has known this shift was coming for a while now. As a result, many of the existing card readers already have the hardware necessary to accept the chip cards. However, depending on your equipment and your processing company, the software may not be turned on or updated. So your best bet is to contact your credit card processing company to find out if your existing equipment can simply be updated. This should really come as no cost to you, and in some cases, it can be done remotely. 


If you don't have an EMV compatible reader, here are a few things to consider when deciding whether or not to upgrade or add to your hardware:


1. Average ticket amount. Generally speaking, if someone is going to use a fraudulent credit card, they are not likely to use it to by a cup of coffee or a quick lunch. So if your business is in the quick serve restaurant or cafe industry, you aren't likely to get a "bad" card, and you could perhaps hold off on getting new equipment if finances are a challenge. However, if your business sells higher ticket items, then you should really consider getting equipment to read EMV cards right away. 


2. Are your sales online or over the phone? Online and phone sales are considered "card not present" sales. The EMV protocol has no effect on these types of sales whatsoever. To be clear, EMV affects only "card present" sales.


3. Do you know your customers or retain their personal information? Let's take a look at something like the medical industry. Although the transactions could possibly be considered "high", the likelihood of you receiving a fraudulent card from one of your patients is very, very low. Remember you have all their information, including address and maybe even social security number. They aren't likely to try to pay you with a fraudulent card. So if you're in an industry where you have your customers' information, or they are often repeating, it's far less likely you'll get hit with a fraudulent card. Therefore it's not as dire that you get a EMV reader. 



With all this said, here are a few more things to consider:


  • Again, check to see if your existing equipment can be upgraded or even replaced for free. It doesn't hurt to ask. (Hint, if there is a slot at the bottom of your credit card processing machine, it's very likely you will not have to purchase new hardware.)


  • If you are using a POS, it may turn out that you will need to purchase additional equipment that will be used with your existing POS rather than replacing the whole thing.


  • The EMV standard has been used in Europe since 1992. Even now, there are places that still accept the magnetic readers. However, there are also places that have only chip card readers. That being said, we feel it will be many, many years before magnetic strips disappear altogether. 


  • Much of the new EMV equipment also comes with the NFC ability. NFC or Near Field Communications devices are able to accept Apple Pay, Android Pay, Samsung Pay, NFC smart cards, etc. This allows the user to pay using their phone or other device. It's not terribly popular yet, but we feel it will be. Look out for another blog post on that subject later!


  • Remember that using the "chip" is safer for the consumer should you experience a data breach, and costs for the merchant can be much higher in this scenario too.


  • Weigh the cost of getting new equipment versus what one, two, or three fraudulent transactions will cost you. This might help you make that decision. 



All that and a bag of chips...


So ultimately, the EMV/chip card is here to stay. It's the new standard, and it's not going away. If you plan to stay in business for at least another ten years, then you will probably need to update your equipment anyway. At the very least, make the call to your credit card processing company to see what your options are. In our opinion, your company should have already reached out to you if you're in one of those industries that's at risk.


If you're not completely happy with your existing merchant services/credit card processing company, or if you'd like a free cost comparison savings report, contact us via or visit You can even check out what others in your specific industry are saying about our one of a kind system and new Smart Terminal! In addition to being able to beat just about any rate, many businesses will qualify for our free equipment program. What? You want to know if that free equipment is EMV compliant? Don't be silly! In a word - yup!


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November 7, 2016

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