What is an EMV chip?
Cards that contain these embedded microprocessors provide robust security features and other payment capabilities that are just unmatched by current magnetic stripe cards. They work by carrying a card holder's information and encrypting it with a randomized token that further ensures security. EMV cards can create these randomized token numbers without a battery. They get power from the terminal, even through contactless technology, using resonant inductive technology. This new contactless technology is much more secure than previous RFID based transactions because it insists on a "hand shake" between the card/smartphone and the reader that must be authorized by the holder.
What's the difference?
Currently, all of the cardholder's sensitive information is stored on a magnetic stripe found on the back of the card. This method of transferring credit card data is more susceptible to fraud and data breach. It uses a swipe and sign method to verify purchases. Newer EMV transactions are based on encrypted data tokens that are changed with each transaction. This would be a chip and pin or chip and signature method of verifying purchases. The cryptogram request is verified by both the merchant's issuer and the cardholder's payment brand. Therefore, fraud liability is decreased on both ends with an increase in privacy. Current EMV cards will come with the magnetic stripe for those merchants who have not already migrated to the new infrastructure.
Check out this informative video by ThioJoeTech on Youtube:
As an incentive to merchants, card issuers are shifting liability to the business instead of the issuer. That means, if a business is not capable of accepting EMV payments, they will be held liable for certain fraudulent charges. These changes took effect on October 1, 2015.
If you own a business, F1 IT can help you make this transition as smooth as possible. Right now, there are many promotions available including free EMV and contactless terminals, as well as free $100 gift card incentives. Even if you have the new technology, we can assist you in re-negotiating your merchant processing fees with some of the most competitive AMEX rates available. Call us today to see how we can help! (516) 468-F1iT ((516) 468-3148)