If you accept credit cards in your business, you have likely heard the term “EMV payment.” This type of payment is the modern standard for in-person credit card payments. Still, while most businesses now accept EMV transactions, it’s a little-understood payment method for those without credit card processing experience.
However, understanding EMV payments can help you better strategize your business protocols. A lack of EMV payment support can result in fraud and liability issues for small businesses.
In this blog, we take a closer look at EMV payments, their benefits, their risks, and other related topics. Let’s dive in!
Table of Contents
What is an EMV Payment?
An EMV payment is a “smart” credit card payment method that requires a chip for authentication. Previously, businesses accepted credit cards with magnetic stripes. While many EMV cards have magnetic stripes, an EMV payment requires the card to be inserted into a card reader (chip reader) for cryptographic authentication.
Many people believe EMV stands for something hi-tech, but that’s far from the case. EMV is an acronym for Europay, Mastercard, and Visa – these are the companies that first created the payment method. However, this doesn’t mean that these card networks have exclusive rights to EMV technology: American Express and other card brands also use it.
EMV Payment Benefits
The benefits of EMV payments for business owners and consumers are numerous. Let’s explore the key advantages of this revolutionary payment technology:
Improved Security
EMV is a preferred payment method because it reduces exposure to fraud. As magnetic stripe data is easily hacked and copiable, it can lead to credit card fraud. EMV chips provide an extra layer of security that can reduce the chances of someone stealing an individual’s card data.
Added Convenience
Changes in payment infrastructure in the United States have led to more convenience for customers. Many POS systems now have contactless payments enabled, in addition to traditional EMV payments, which means customers can tap their cards for smaller payments (this does not require a pin or signature).
Reduced Liability
As EMV payments are much more secure, the major card networks (card brands) are now requiring EMV transactions if businesses want any fraud coverage. Visa, American Express, Mastercard, and Discover all require EMV payments for fraud protection.
This means that while you don’t HAVE to support EMV payments in your business, you expose yourself to liability and chargebacks by not having it. If a customer uses a simple magstripe payment instead, the liability falls on the merchant and the issuing bank.
EMV Payment Risks
While there’s no doubt that EMV payments are more secure than traditional magstripe payments or online payments, there are also a few downsides:
Doesn’t Protect for Card-not-Present (CNP) Fraud
Most credit card fraud doesn’t happen with physical card payments – it occurs online. While EMV chips protect against some forms of in-person EMV payments, they can’t provide any protection against fraudsters using card numbers to purchase goods and services online.
Other Vulnerabilities
While EMV payments offer more security than traditional magstripe credit cards, there are still vulnerabilities. Malware and other digital attacks can result in EMV payment issues, so fraud can still happen.
EMV FAQs
We receive many questions about EMV payments. Let’s explore some of the most popular EMV questions and answers below:
Do All POS Providers Support EMV Payments?
While most POS companies now support EMV payments due to liability issues, it’s important to double-check that you’re accepting this type of payment. Almost all in-person payments now occur on EMV. Moving to a new POS provider is worth it if you are unable to access EMV technology.
Are EMV Payments More Expensive?
In most cases, EMV payments will not be more expensive. Most credit card processors have standard charges for in-person payments (when the card is present).
Do EMV Payments Put My Business at Risk?
No. While no payment method is safe from fraud, EMV payments are thought to be much more secure than traditional magstripe credit card transactions. In fact, not having EMV payments can result in your business being liable for fraudulent charges (most card networks and merchant providers no longer provide fraud protection for non-EMV payments).
Is There a Difference Between “Chip and Signature” and “Chip and Pin?”
EMV payments work with both “chip and signature” and “chip and pin.” With chip and signature, you insert your card and sign for the purchase. With chip and pin, you insert your card and enter your pin number to verify the payment.
Is Apple Pay an EMV Payment?
No, while Apple Pay is similar to EMV payments, it uses near-field communication (NFC) to transmit card data to credit card processing devices.
Are All Credit Card’s EMV-Payment Enabled?
No. While EMV payments now dominate the credit card payment landscape, there are still cards that don’t have this type of technology. Your card needs an EMV chip to benefit from this type of payment system. If your card only has a magnetic stripe, it is not EMV-payment enabled.
Conclusion: Unlock the Power of EMV Payments in Your Business
If you don’t already work with a POS provider that supports EMV payments, it’s time to upgrade. At POS USA, we review some of the leading EMV point-of-sale platforms on the market. It’s our goal to connect our readers with the best POS technology available!
