Last fall, the federal government instructed retailers to upgrade their sales terminals with EMV (Europay, MasterCard, and Visa) chip credit card readers. Although most have complied with the hardware upgrade, the software at many terminals has not been activated, leaving customers confused when told not to use the new slot and concerned about their financial transactions.
The new chip card technology (plastic debit and credit cards with the tiny, shiny metallic microprocessor chip embedded into the front) is supposed to add an extra level of fraud protection during the transaction process for consumers. But with terminals partially functioning and only select retailers on board, the entire process is confusing and causing lots of myths to circulate.
Here’s the 411 on what’s going on, what’s really new about the cards and how your payment system has changed.
Myth 1: Customers need a chip card to pay at brick-and-mortar retailers now.
Nope. Even though financial institutions are lagging and haven’t issued new cards to everyone yet, people can still go shopping. Many stores are still using the old technology, or hybrid EMV terminals that read both older and new cards.
Myth 2: The new chip cards send personal information to the retailer.
Untrue. The new chips store personal information including the cardholder’s name, the card number, its expiration date and the security code that is used to communicate with the financial institution that issued the card. This data is never shown on the retailer’s POS screen.
Myth 3: Customers are liable for fraudulent transactions if their new chip card is stolen.
Heck no. With the new technology, liability has shifted from the financial institution that issued the card to the merchant where the fraudulent purchase was made. If a thief tries to buy something using a stolen card, the retailer is now liable for the loss of funds — not the customer or their bank.
Myth 4: Swipe-based credit card machines can read the new chip cards.
Not exactly. The new EMV cards are inserted (not swiped) into a separate slot on the terminal and remain in the slot for several seconds while the system communicates with the financial institution that issued the card. So don’t be surprised if chip card transactions take longer to process than magnetic stripe cards.
Myth 5: The United States is the only country using this new technology.
Wrong. Over 80 countries in Europe, North America, Asia, and Latin America are in the process of implementing EMV chip cards and EMV-enabled POS terminals.
If your business has concerns about the EMV technology implementation or needs help setting up new POS systems, Accucode can help. Contact us today!