What is all this EMV stuff really about?

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First , lets understand what EMV really stands for.

It is the first letters of the three credit card companies that started the “Chip” technology that will be on credit cards later this year.

Europay, Mastercard and Visa.

So why do we need to go to this?

Credit card fraud is an awful thing.

What happens with a chip embedded credit or debit card is, it is inserted into a reader, and the chip creates a unique transaction number for that particular sale. Then it waits for you to enter your Pin number.

Because the transaction number is unique, and you are entering your pin, it is more secure than a magnetic reader reading off the credit card numbers from a stripe.

Now, let’s look at some things that really effect businesses.

The “Chip and Pin” technology does NOT prevent credit card fraud when your card number and expiration are given over the phone, or through a system that does not have the chip reading technology. These are called “Card Not Present” transactions.

One of the things that will effect a business, is if the credit card processing system does not have the Chip and Pin capability.

If you own a business, do not have the EMV compliant equipment, and credit card fraud happens, the store owner is responsible for the charges.

If you DO have the equipment, but the bank that issues the card did not include the chip and pin capability, the bank is responsible for the charges.

As was seen in Europe, which adopted the Chip and Pin several years ago, there will probably be a decrease in the credit card fraud at the cash register, and an increase in the Card Not Present type of fraud. We will have to see how the credit card companies deal with that.

The Chip and Pin technology is not a perfect solution. But it is better than what we currently use.