“What are the important dates related to EMV mandates?”
• October 2015 is when liability shifts from issuers to merchants for counterfeit card fraud.
This shift occurs for card present transactions where the merchant is not using an EMV compliant device (with the exception of fuel merchants).
• 2. “What are the ramifications if a merchant is not EMV compliant?”
If a merchant chooses not to replace the non-EMV POS device with an EMV compliant POS device by October 2015, then the merchant is subject to the liability shift for card present counterfeit fraud transactions. If the merchant accepts a non-EMV card, has a EMV POS device and the transaction is fraudulent, the merchant has chargeback rights. If the merchant accepts an EMV card and does not have a EMV POS device, then the merchant does not have chargeback rights. It would also be possible for a merchant to be liable for accepting a non-EMV card if it is a counterfeit magnetic stripe card.
3. “When will EMV-capable terminal applications be available?”
Merchants that have EMV-capable terminals will need a download to enable EMV acceptance and possibly a peripheral device for contactless EMV card processing.
4. “Will a merchant see any cost savings by becoming EMV compliant; what is the benefit?”
A cost savings benefit a merchant will receive is a reduced risk of losses for counterfeit fraud chargebacks.
5. “How will EMV requirements impact mobile/micro merchants (i.e. PayFox®)?”
EMV liability shift affects all card present transactions.
There is no distinction for mobile/ micro merchants.
06. “Are EMV requirements applicable to Aggregators/PSPs (i.e. Square®, etc.)?”
Yes, EMV requirements apply to Aggregators/PSPs card present transactions.
6. “What is the current and forecasted percentage of U.S. consumers with EMV-capable cards (or contactless cards/devices) over the next 3 years?”
• According to the EMV Migration Forum, as of December 2013 there were 12.7 million EMV cards issued in the U.S. • MasterCard® EMV cards are predominantly issued on an “at request” basis, usually for international travel. • The number of EMV cards issued by American Express® and Discover® in the U.S. is not available. • The card brands have not published the forecasted percentage of U.S. consumers with EMV-capable cards (i.e. chip/NFC) over the next 3 years. • PYMNTS.com published the following: » Out of the 1 billion cards that are in use in the U.S., only 20 million EMV cards have been issued. By the 2015 deadline if the current trend continues, only 20 to 30 percent of U.S. cardholders will have the new EMV cards.
7. “To be EMV compliant does a merchant need to support chip-and-PIN, chip-and-signature and NFC?”
• Visa » Credit card supports chip-and-signature » Debit cards will support PIN » Require processors to support NFC, however merchants are not required to support NFC although it is strongly encouraged. • American Express and MasterCard » Require processors to support chip-and-PIN » Merchants must support NFC in order to qualify for liability shift. • Discover and MasterCard » Require processors to support online and offline PIN support. Offline PIN support is when the terminal validates the PIN.
8. “If I am EMV compliant do I still need to be PCI compliant and incur PCI related validation fees?”
Merchants must maintain PCI compliance.
9. “What is the estimated “realistic” exposure (from a financial perspective) to a merchant, if they are not EMV compliant, post 2015 liability shift?”
The merchant’s liability depends on the amount of counterfeit fraud chargebacks they have.
10. “What if any differences in EMV requirements are there for cash advance merchant accounts?” There are no unique EMV requirements for cash advance merchants. They have the same liability shift as all card present merchants.
11. “What dates surround the Visa contactless requirement?”
Effective January 1, 2015, Visa contactless readers must support the Visa payWave® message format and no longer support the early adopter message format. Visa does not require merchants to support contact and contactless, but strongly encourage it.
12. “If a merchant chooses not to upgrade their equipment to accept EMV, will they still be able to process transactions?” Yes, however they are subject to the liability shift for card present counterfeit fraud chargebacks.
13. “What are the most significant differences between EMV and magnetic stripe transactions from a security prospective?”
• Magnetic stripe data is static; the data is the same each time the card is used at all terminals and is easily cloned. • EMV incorporates cryptographic algorithms with dynamic data to ensure the card is authentic which makes cloning extremely difficult.
Questions? Call Richard 404-788-4420
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