EMV Compliance: Everything You Should Know

Wednesday, November 18, 2020

If you're a business that accepts credit or debit cards for payments, EMV compliance has probably been something that you've thought about often since it was originally enacted back in 2015. But, what exactly is EMV compliance, why does it matter and why should you care?

You’ll just have to keep reading to find out.

What is EMV Compliance?

EMV is actually an acronym that stands for "Europay, Mastercard and Visa" - the three companies that banded together to establish new standards for credit and debit card security and compliance in the first place. Open your wallet and take out one of your credit cards right now - the chip that is present, usually on the left side of the card, is ultimately the cornerstone of what EMV compliance is all about.

That chip is designed to make modern day credit and debit cards far more secure than past alternatives, especially when compared to the magnetic stripe-based cards that were common for decades. The problem with the magnetic stripe is that, while it's secure from a certain perspective, the data contained on it never changes. Anyone who has access to that data - which someone would if they stole your credit card, for example - instantly gets all the personal and private cardholder information along with it.

For years, this has made magnetic stripe cards prone to counterfeiting, partially because the data never changes and partially because it's so easy to do. EMV cards, however, create a unique transaction code every time you use it that CANNOT be used again. If someone tried to duplicate your card based on a specific transaction (like if you accidentally used your card at a credit card skimmer), they wouldn't be able to use it again because the code itself is always different. In all likelihood, when someone tried to use that duplicate card, the transaction would just get denied.

EMV compliance means that a business has upgraded their point-of-sale equipment to feature credit card readers that support EMV payment technology. If a customer walks into the store and is asked to insert their credit card into the slot on the machine, that store is EMV compliant. If the only option is to swipe the card via the magnetic strip on the back, the store in question probably isn't EMV compliant.


Why Does EMV Compliance Matter?

Simply put, you should care about EMV compliance for one very important reason: liability.

It's always an important topic but in this particular case, it's also one that impacts small and medium-sized businesses in particular.

Under the old rules, if a fraudulent purchase was successfully executed by someone who had stolen a credit card, liability for that fraud fell to the credit card issuer. This is the way things operated for years until EMV compliance became a factor.

Now, if a fraudulent purchase is successful, the working theory is that it has less to do with the card (because the EMV chip is supposed to be so secure) and more to do with your inability to actually use that chip in the way that it was intended. Because of that, liability was  shifted from the credit card issuer and onto the business involved in 2018. If you were only accepting credit card payments via a magnetic strip as of October of 2018, your business would automatically be held responsible for all fraud-related charges—end of story. EMV compliance simply means that you’ve upgraded your point-of-sale equipment to machines that can take the chip or the magnetic stripe depending on the preferences of your customers. If you did make the decision to upgrade by the deadline back in 2018, and were involved with a fraudulent charge, you wouldn’t be liable - which, depending on the type of business you're running and the average dollar amount associated with each transaction, will likely more than pay for the cost to upgrade in the first place.

Heartland: Your Partner in Compliance and Beyond

At Heartland, we're incredibly proud of the reputation we've built over the last several years as one of the leading payment processing and merchant services companies in the United States. More than anything, we're singularly committed to providing you with ALL of the tools you need to grow the type of business you've always wanted. From that perspective, we consider every one of our customers to be true partners in every sense of the term.

If you'd like to find out more about EMV compliance, or if you'd just like to sit down and speak to someone about your own needs in a little more detail, please don't delay - contact Heartland today.

Heartland is the point of sale, payments and payroll solution of choice for nearly 1,000,000 businesses on a mission to sell more, keep customers coming back and have more time to focus on building a remarkable business. Learn more at heartland.us