March 30, 2010

What is EMV and how does it affect payment processing?

As of 2009, more than 944 million EMV compliant chip cards are in use around the world. EMV is a standard that businesses of all sizes, across all industries, adopt to ensure safe and reliable debit and credit card transactions.

What is EMV?

EMV is the standard that allows chip and PIN cards to operate with chip-enabled terminals and ATMs.

EMVCo is a public company that manages, maintains and enhances EMV Integrated Circuit Card Specifications Standards.

• In 1999, EMVCo was founded by Europay International SA, Mastercard and VISA.
• In 2002, Europay International SA was absorbed into Mastercard.
• In 2004, JCB (formerly Japan credit Bureau) joined the organization.
• In 2009, American Express joined the organization.

EMVCo’s main activities are to:

• Ensure the compatibility and acceptance of chip cards globally.
• Develop an internationally recognized standard for chip-based payment processing.
• Test and approve processes that evaluate compliance with EMV standards.

How do EMV standards affect my business?

The introduction of EMV standards brings many changes that affect merchants around the world.

• EMV standards improve the customer experience. Customer information is protected by cryptographic algorithms, providing improved security between chip cards and chip-reading terminals during transactions.
• EMV standards can save you money. Since these standards improve the security of transactions, transactions that follow EMV standards can be subject to lower payment processing fees.
• EMV standards reduce your liability for fraudulent activity from lost or stolen payment cards. Notably, as of 2010, merchants without EMV compliant devices are fully liable for the cost of credit card fraud directed at their business.
• EMV standards allow merchants to process international payment cards securely and efficiently.

What is the difference between EMV and PCI DSS?

EMVCo cooperates with other organizations to ensure a common interpretation of EMV standards. It also ensures that the standards are integrated with other security standards, like PCI DSS. However, EMV standards and PCI DSS are not the same thing.

• EMV standards define the physical and electronic requirements for chip cards. Its focus is limited to the physical card, and not the cardholder data that is associated with it.
• PCI DSS focuses on the security of the cardholder data once a transaction has been initiated. This includes the data that is stored, processed or transmitted, and can include multiple parties such as merchants, service providers or data storage entities.

Speak with one of our VersaPay Relationship Managers today if you have any questions about EMV standards or would like to learn more about how you can upgrade to an EMV capable solution.