Getting to know EMV

You’ve probably heard about EMV. But you may be wondering just exactly what it is, and how it applies to your restaurant organization. With that in mind let’s review some of the basics.

EMV is an acronym that refers to “Europay Mastercard Visa”. These three payment processors created the standard in the 90s. Since then other companies have adopted the payment processing technology including American Express, Discover, JCB, and UnionPay, as well as several others.

Why? Because it provides a higher level of security that both significantly reduces card fraud and reduces the risk of a large-scale data breach.

How? By embedding a chip that is very difficult to copy, and by using powerful encryption to encode card data before it leaves the card reader. As a result individual transactions can’t be easily intercepted while in transit, and the data can’t be used to create a counterfeit card since the data contained on the magnetic stripe (by itself) is insufficient to duplicate the card.

EMV is a long-established technology that has been used around the world for decades. Today, nearly 70% of all transactions globally are completed using EMV, indicating that the vast majority of non-EMV transactions are in the US. Adoption here in the US is underway now, driven by strong rules changes from VISA and Mastercard together with the large-scale issuance of chip-equipped cards by American banks. Over 300,000,000 chip-equipped cards are now in use in the US, and much of the merchant POS installed base is already or will be EMV equipped soon. As a result, many payments experts forecast that by the end of 2017 most US card transactions will be EMV based, with universal adoption within the next 5 years.

Initially, most EMV systems will use a chip and signature flow, which mimics the payment process of magnetic stripe cards. The logic in adopting this approach is that most consumers in the United States are already accustomed to verifying transactions with a signature. However, over time our economy will likely migrate to join the rest of the EMV world by using chip and pin, which is more secure and is standard across most EMV markets. If your ATM card is already equipped with a chip, you may be using EMV chip and pin today at your local ATM machine.

EMV is the most significant change in payment processing in many years. Many restaurants have already made the change to EMV hardware, in order to avoid liability for fraudulent transactions. If your restaurant hasn’t already made the change you should begin planning your migration strategy now.