As you may know, EMV—an abbreviation for Europay, MasterCard and Visa—is an alternative and more secure manner of processing in-person credit card payments. Instead of swiping credit cards, a process that uses information stored on a magnetic strip for the transaction, consumers insert their credit cards into a special EMV terminal that reads information from a chip implanted in the card itself.
EMV only benefits those merchants conducting in-person transactions and doesn’t provide any additional security to organizations that may sell merchandise via phone, mail, or through a website.
Merchants across the country will begin using EMV in October 2015, but its use is optional, depending on risk level assumed by the merchant. In addition, PCI compliance is not affected by implementing—or not implementing—EMV.
The chip makes duplicating a card for fraudulent purposes much more difficult. Currently, if a merchant processes a counterfeit (reproduced or cloned) credit card, the fraudulent activity from the sale is generally absorbed by the bank. After October, merchants that have not implemented EMV could be responsible for these charges. The risk protection offered to merchants by EMV is fairly narrow, since other types of chargebacks, like disputed credit card transactions from lost or stolen cards, or dissatisfaction with a product or service are not protected.
Most U-M merchants that choose not to implement EMV will not face significant levels of additional risk due to the type of business they transact. EMV will primarily benefit merchants that sell physical goods (especially high-ticket items) as compared to those accepting cards for services (e.g., health clinics taking co-pays, food vendors, event organizers, etc.).
With that in mind, EMV may not be beneficial when balanced against the cost of the new equipment and the need to acclimate employees and customers to a new model of handling credit card transactions. Additionally, merchants using analog credit card terminals will experience significantly longer than usual transaction times, which may result in some transactions timing out.
By September 18, 2015, the Treasurer’s Office will contact university merchants that it feels may incur more risk as a result of not implementing EMV.
If, however, you feel that your area is at risk, please contact the Treasurer’s Office immediately. Otherwise, your processing method will not change. Any merchant can opt for EMV processing at any time in the future by contacting the Treasurer’s Office by email at firstname.lastname@example.org.
Merchants that choose to implement EMV will need to purchase an EMV-compatible terminal, if they don’t already have one, and a PIN pad. Each terminal costs $475 and a PIN pad will cost approximately additional $200. Please feel free to contact us (734) 763-1299 or email@example.com with any questions about EMV.