EMV Chip Card Transition for Merchants. What is an EMV Card?

An EMV chip card is a standard-size credit/debit card plastic with an embedded microprocessor chip that stores and protects cardholder data. The global standard is called EMV, short for Europay, MasterCard, Visa.

If your card information is compromised in a data breach, the embedded EMV microchip makes the card extremely difficult to counterfeit or copy. Although EMV cards are not common in the U.S., the technology has been used around the world for many years. There are currently more than 1.5 billion chip-enabled cards issued across the world and some U.S. banks already issue chip cards.

EMV cards will be issued with the traditional magnetic stripe and older Point of Sale (POS) terminals will continue to function, but new terminals must be installed to read the new EMV chip cards. Another key difference is a traditional magnetic stripe card can be “swiped” through the POS device, while an EMV chip card must be inserted into the terminal and remain in the terminal until the transaction is completed.

To encourage the migration to new terminals, the major card issuers have mandated a “Liability Shift” date of October 1, 2015. One exception to this mandate will be “pay at the pump” terminals at gas stations. The liability shift for these devices occurs on October 1, 2017. The Liability Shift states that if a customer presents an EMV enabled card, but the merchant’s terminal can only process magnetic stripe cards, then any fraud committed using counterfeit cards at the POS terminal becomes the responsibility of the merchant. It is possible that criminals using counterfeited cards would prey upon merchants with older magnetic stripe only POS terminals. Banks are taking different strategies on the replacement of the mag strip card with some banks replacing all magnetic stripe cards in October; others will be replacing the cards over time as they expire; and some are taking no action at this time. F&M Bank will begin reissuing Visa debit cards and credit cards to its card holders in the fall of 2015.

If you are a merchant and would like to learn more about EMV acceptance and how to update your POS terminals, contact our Business Solutions team by calling 540-433-7575 or emailing BusinessSolutions@fmbankva.com. We will be happy to assist you and answer your questions.

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