Benefits of Using New EMV Chip Credit Card Technology:
1. Using a chip cards makes it nearly impossible to counterfeit stolen cards
2. The computer chips allow for ‘one time use’ transactions
3. Stolen chip data cannot be duplicated
4. Less risk of fraud
5. Liability shifts from the merchant to the card holder’s Bank.
EMV (Chip and Pin and/or Chip and signature in the U.S.) is basically a chip in the credit or debit card that replaces the magnetic strip on the back of the credit or debit card. With the old cards the merchant would swipe a card and the credit card terminal would read the data in the magnetic strip and process the card. With the new EMV requirements the credit card terminal, pin pad or ATM, will have to read the chip instead of the magnetic strip. Once the credit card terminal reads the chip the customer enters their 6 digit “Pin Code for ATM Transactions” or sign with their signature.
MasterCard defines the liability shift on Oct 1 this way: “The party, either the issuer or merchant, who does not support EMV, assumes liability for counterfeit card transactions”. By issuer, the card companies do not mean themselves; the term refers instead to banks, credit unions, and any other financial institution issuing credit or debit cards. If the issuers can shift any of these costs on to a merchant that is not compliant you can be sure they will.
Merchants must get new payment terminals installed by the Oct 1 deadline, or the retailer bears the responsibility if they accept a stolen card.
Retail merchants still using the less secure “magstripe credit card terminals” will be able to accept credit and debit cards after Oct 1, 2015 deadline. However, they will have no protection if they accept counterfeit credit cards or debit cards as a payment method. It’s also possible they’ll get monthly non-compliance fees of $20-$40 per month and possible surcharges of 1.5%-5.0% on top of whatever their normal transaction fees are.
Electronic Transfer, Inc. offers retail payment services to Restaurants, Retail Stores, Mobile Vendors, Online Merchants and many other legal businesses.
If you have any questions about accepting the new chip credit cards please call 1-800-757-5453
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