EMV For Your Small Business

EMV For Your Small Business

The concept of ‘Plastic Money’ that is use of credit or debit cards has taken the world by storm. Till two decades in the past, people had no idea how to maintain and improve their financial discipline. For financial transaction the currency had to be carried along, stuffed in briefs, wallets or whatever sources. It was very cumbersome and fraught with the risk of loss due to theft or negligence in transit. Moving with money was not only inconvenient but involved lot of risks. What if the money you carried was insufficient to strike the deal or instead if you carried checks bounced or was not acceptable to the client to be or the signatures on these checks did not match or the banks showed reluctance in negotiating the checks.

The obvious answer to these queries may be that your deal may not come though. Similarly your effort to shop around may meet the same fate and you may have to face similar situations.

It is here that this plastic money-credit or debit cards took the world by storm and transformed the realm of money transaction into a safe and convenient move inland and across the globe. If you are regular or even occasional traveler and traveling is your passion and you travel places, you may be well acquainted with travelling nuances and would indeed know the advantages of this plastic money- credit or debit cards. It is very convenient alternative to stuffing your brief, wallets and bags with currency.

With times, there have been various changes in credit or debit cards. If you are a tourist and you travel in Europe or United States you may have noticed new kinds of credit card terminals at checkout counters. These new devices have familiar magnets strip readers with up to two new sensors, a slot for credit cards with exposed “EMV Chips” and a pad for “tap and go”, payments.

In recent years Europe has been a testing ground for “New Credit Card technology”, which could make you present credit cards obsolete.

How To Decipher The new Credit Card Lingo:

The acronym ‘EMV, comes from trio of processing networks, that revolutionized the card technology E(Europay), M(Mastercard), V (Visa). (Mastercards overtook Europay in 2002). From mid 1990s, EMV has emerged into a global standard that accounts for world’s credit or debit card transactions.

The traditional credit card in America has a magnetic strip on the back that contains a weekly encoded version of a credit card number. These cards are read by swiping the card through a card reader.

As a contrast to it, under ‘EMV’, credit card data is read from a microchip embedded in the card. This microchip provides a ‘tokenized’ validation code instead of new account details.

Older EMV eMerchant terminals require that a credit card with a content chip (which is a metallic chip on the surface of the card) be inserted into a card reader.

As a contrast in the ‘core EMV standard’, it is no longer required to swipe the card instead these contactless credit cards are to be tapped or you have to waive your chip-enabled card near a payment pad, instead of swiping or inserting it.

The payment pad transmits a radio signal which activates the chip. As a further modification these contactless cards use a modern technology called RFID (Radio Frequency Identification), whereby it transmits card date to a passive reader.

Based on situations, merchants can avail anyone of the three methods to validate the identity of the cardholder. These methods are, 1. Chip and Pin 2. Chip and signature 3. Chip and no signature

Chip and Pin: In Europe, the card holders are required to memorize and key in a pin for credit or debit card transactions.

Chip and signature: In America, a merchant terminal validates cardholder’s identity using a signature instead of a pin.

Chip and no signature: For small purchases, American merchants can choose to waive the signature requirement, altogether by relying exclusively on the EMV chip’s validation.

Advances in NFC (Near field communications) technology provide wireless phone to mimic the signal emitted when a merchant terminal accesses the EMV chip, allowing transactions to be completed without using a physical credit card.

While Europe used Pin, America looks further ahead. In Europe, merchants are made responsible for the cost of unverified transactions which made chip and Pin, the preferred mode. After becoming the routine target for ‘Credit card fraud’, merchants prefer exclusive Chip and Pin transactions.

American Bankers Association is convinced that 25% of American merchants accept Pin based transactions citing inconvenience as major factor to show ‘chin and pin’.

Future EMV in America: ‘EMV’ has become popular in America. Visa and other major credit card process or plan to make EMV essential for payment security and prevent frauds.

MasterCard, calls their EMV implementation “Pay Pass”. As a partner in Google wallet, MasterCard announced merchant EMV adoption for contactless credit cards and mobile payment methodology.

Visa, called their implementation as ‘Paywave’

American Express tests smart card technology with its blue card and termed as ‘Express Pay’ brand, merchant may qualify for full protection against fraudulent transactions.

Discover: experimented with a keychain ready version of its credit card branded as ‘Discover 2G’.

Contactless technology is getting popular day by day and is an easy mode for quick and secure transaction. These cards are beneficial to the common user and companies who deal with vast transactions. Contactless technology was first introduced in 2007 and has about 20,000 stores in U.K which speaks of its vast popularity.

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