What to Know About EMV Chip Technology

If your business accepts credit and debit cards, you probably pay close attention when companies such as Target and Home Depot suffer credit card data breaches. Payment card breaches are costly in terms of hard dollars and reputation. And given the popularity of cashless in-person, mobile and online transactions, it’s no surprise that cybersecurity is one of the biggest and most important issues facing every business.

It’s also no secret that today’s hackers are sophisticated, difficult to catch and living all over the world. Protecting customer data has never been more urgent. Card issuers are jumping on EMV chip card technology to protect their customers and reputations — including the reputations of the merchants who count on secure transaction processing.

What Are EMV Cards and How Do They Work?

EMV stands for Europay, MasterCard and Visa. It represents the new payment security standard, and card issuers are using EMV chips implanted in cards to validate chip-card transactions. With older card technology, a counterfeiter could steal and use card account data to duplicate the physical card. The new chips make duplication extremely difficult, if not impossible.iStock_000024195765_Large

When a cardholder makes a legitimate purchase using the chipped card, the EMV chip card reader will authenticate the chip in the card while also transmitting the payment data via a secure line. The network processor will forward encrypted card data to the bank, which will verify the card has not been stolen. The bank will also verify that funds or credit are available to make the purchase. If any part of the transaction fails, the merchant cannot complete the purchase.

You might already have an EMV chip card in your wallet. Take it out and look at it — does it have a small and shiny square? That’s an EMV chip. Unlike the magnetic strip on old-fashioned credit and debit cards, which contains unchanging data that can be duplicated again and again, the EMV chip gives every transaction a unique code. Even if a sophisticated data thief were able to find the transaction number from a legitimate completed transaction, using the card again would prove fruitless because the new code for the fraudulent purchase would not match the old code.

Why Are EMV Cards Popular?

Credit and debit card thieves do enormous damage to the economy. Consider the costly problems that every card theft has the potential to cause to businesses and consumers: identity theft, fraudulent purchases, stolen cash, credit monitoring services, attorney fees, card replacement costs and more. It is not a victimless crime, and extra costs incurred by businesses who suffer a data breach wind up costing consumers in the end. Banks, processors, merchants and customers all have a vested interest in keeping transactions secure and confidential.

Card issuers expect the new technology to reduce fraud costs incurred by merchants and banks while protecting sensitive payment data. Although EMV chip cards won’t stop data thieves from trying to steal and replicate consumer credit and debit cards, it will do a better job protecting cardholders, merchants and banks from the damaging consequences of fraudulent transactions.

Federal Benefits and EMV Cards

There are more reasons to love EMV cards. President Obama signed a 2014 executive order requiring all federal benefits to be issued on government-issued chip and PIN cards (EMV cards). The chip and PIN cards will replace the current benefits debit card, which features the traditional magnetic stripe. People who receive Social Security benefits, SNAP benefits, and other federal and state benefits will use the new chip-enabled cards.

Why Should Your Business Accept EMV Cards?

The United States is one of the last first-world countries to move to EMV cards and chip and PIN terminals. Should a bank refuse to issue cards with a chip and instead stick with the magnetic strip, the bank will be held liable — an unlikely scenario.

The bottom line for businesses is that EMV technology is coming, it’s here to stay, and the financial and reputational risk to merchants who don’t switch to the new technology is huge.

How Native Merchant Services Can Help Your Business

Native Merchant Services is a full service ISO that provides cutting-edge payment processing technologies, outstanding cybersecurity and best-in-class customer services at the lowest guaranteed rates in the industry. We can guarantee the lowest rates because we are Native-American-owned. We don’t pay taxes, and we pass those savings on to you. That means your business doesn’t have to sacrifice technology or service for access to the reliable and fast payment technology you deserve.

In addition to powerful EMV chip-enabled terminals, you can also get powerful data analytics that will reveal more about the habits and patterns of your customers. Imagine knowing what your most profitable time of day is, or who your most valuable staff members are. You could also learn where your customers come from and how much they spend on repeat visits — securely, and without damaging their trust.

Call Native Merchant Services

Native Merchant Services has the EMV chip, and PIN, chip and signature terminals your business needs to protect itself against data fraud. For more information about EMV technology, or to learn more about how Native Merchant Services can provide you with the lowest guaranteed payment processing rates, complete our online form today.

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