EMV, also known as “Chip and PIN”, is a credit card processing technology designed to increase security and reduce fraud. It uses special devices to read data from a chip embedded in your customer’s credit card instead of using the magnetic stripe. Magnetic stripes are prone to being copied and encoded on fraudulent cards, which is much more difficult for criminals to do with chips. The addition of a PIN code entered by the customer for most transactions enhances security further, though some credit cards will still use a signature instead.
This technology has been in existence since before the turn of the century. It has come into widespread use internationally over the last decade. Europe moved to EMV platforms in 2010, and Canada in 2011. This changeover has now come to the US, effective October 1st, 2015.
How EMV Affects Merchants
The most important thing to understand is the changeover to EMV is not required for merchants. All of the major card brands will continue to accept cards processed using manual entry or magnetic stripes. However, effective October 1st there was a changeover in how fraudulent transactions are handled by the card brands.
- Visa – http://usa.visa.com/download/merchants/bulletin-us-participation-liability-shift-080911.pdf
- MasterCard – http://www.mastercard.us/mchip-emv.html
- American Express – http://about.americanexpress.com/news/pr/2012/emv_roadmap.aspx
- Discover – http://blog.discovernetwork.com/stories/news/discover-announces-next-steps-for-emv-deployment-across-the-globe/
Since these rule changes took effect in October, if you haven’t converted to EMV technology then you are potentially responsible for fraudulent transactions at your POS stations. The exception is for cards that don’t have chips yet. In this case the merchant isn’t liable for fraudulent transactions performed with a magnetic stripe. A good summary of the impact can be found at PaymentsSource.
The liability shift leaves merchants with three options:
- Make the changes and hardware purchases necessary to support EMV in their POS system
- Change to using EMV Capable standalone hardware devices, with no POS integration
- Continue processing using your current system, but accept the additional fraud liability risks
How CenterEdge Is Addressing The Liability Shift
CenterEdge is working with our merchant processing partner, Vantiv Integrated Payments (formerly Mercury), to provide a secure and effective EMV solution for all of our customers in the US. This solution came in multiple phases, due to the complex security and certification process involved. Additionally, breaking the conversion into two phases allowed merchants to get ready in advance, rather than a last minute crunch.
Phase 1 was to help our merchants become EMV Ready. This is accomplished by implementing support for a new PIN pad, the Verifone vx805. In the first phase, this device will immediately deliver credit card acceptance with End-to-End Encryption (E2E), PIN debit support, and support for contactless payments such as Apple Pay and Google Wallet. This support became available in version 15.2 of Advantage.
Phase 2 was to become EMV Capable by adding support for EMV to the vx805 pin pad. This support became available in Version 15.4 of Advantage.
There have also been ongoing improvements in our EMV integration. We recommend that customers use Version 15.6 or later for EMV processing. Support for PIN debit transactions was also made available in Version 16.1.
We are also researching other alternatives with other merchant processors and/or PIN pad devices. However, we chose to focus on this solution first since it provides the most complete and affordable solution for the widest range of our clients. We do not currently anticipate having another solution available prior to the October 1st liability shift.
What Can Merchants Do To Convert
There are several things that we are recommending that our US merchants do to convert to EMV.
- If you are not already using Mercury/Vantiv for your on-site payment processing, we recommend contacting a Mercury representative at (800) 846-4472 to discuss a changeover. You may also complete this online form, and a Vantiv representative will contact you. Before contacting Vantiv, gather your current processing information such as rates and when your contract ends. We have found that Mercury is very helpful when it comes to matching rates and changing contracts.
- Order your vx805 PIN pads from CenterEdge, so that you have them on hand. You can contact firstname.lastname@example.org to order the devices. Do not simply order these devices from the internet, they must be prepared with special encryption keys.
- Ensure that all of your computers are running Windows Vista or later, or Windows Server 2008 or later. Since version 15.1, CenterEdge Advantage no longer supports Windows XP or Server 2003. These old operating system are also not PCI compliant.
- If you aren’t running CenterEdge Advantage 15.6, go ahead and schedule a software upgrade. Note that you must have a valid CenterEdge support contract to be eligible for upgrades.
- Once you receive your vx805 PIN pads, schedule your changeover to EMV with by contacting email@example.com.
Notes Regarding Debit Cards
CenterEdge Advantage added support for EMV clients to accept debit cards using a PIN number beginning with Release 16.1. However, there are currently some caveats related to this support, due to limitations in the EMV processing platform.
- PIN entry for debit cards is only supported for cards without a chip at this time. For cards with a chip, the transaction will always be processed as a credit transaction. We expect this limitation to be removed in the next few months.
- Tokenization (secure card number storage) is not supported for debit cards. Therefore if you are performing a CenterEdge transaction that expects tokenization, such as a recurring membership sale, the customer will not be presented with the debit option.
- Cash back is not supported at this time for EMV debit transactions. If this is a concern for your business model, we recommend remaining with a non-EMV processing solution.
Special Concerns For Full Service Restaurants/Bars
For full service restaurants/bars, there are some special concerns related to EMV that need to be addressed. In particular, there are differences with PIN entry and with gratuity processing. We recommending contacting the CenterEdge Software support department to discuss your options prior to ordering any vx805 hardware.
If you have any further questions about this changeover, please contact firstname.lastname@example.org.