Credit Cards – EMV

Credit Cards – EMV

What is EMV? U.S. banks are switching up the insides of credit cards. They’re adding something called EMV technology, which stands for “Europay, MasterCard, and Visa.” Translation: Credit cards will be equipped with a super-small chip that’s extremely hard to counterfeit. If you’ve gotten a card recently, chances are it has an EMV chip. EMV is not the same as PCI DSS. EMV protects against counterfeit card fraud, PCI compliance focuses on security of sensitive data.

To be EMV compliant, you will need new hardware to read these chips. The magnetic swipe will not be EMV compliant. Instead of the swipe, the new process will be more of a “chip-and-dip.” Chip cards are inserted, or “dipped,” into the payment device and left in place for the entire transaction as the reader and card talk back and forth. We will get into the hardware more later but first let’s talk about how this affects you as a business owner.

What does this mean to me and my business?

For the merchant, this means starting in October 2015, the liability shifted. This might mean potential charge backs to you, the merchant, depending on your level of secure technology. Formerly, if a counterfeit card was used in your business, the issuer was liable. Since October 2015, the party using the least secure technology is liable. For chip cards, if the merchant does not have a chip terminal or chip card reader, the merchant will be held liable. Formerly, if a lost or stolen card was used in your business, the issuer was liable. After October 2015, for chip and pin cards, the merchant is liable if the terminal or customer verification method they are using is less secure.

Is EMV compliance right for you?

EMV is not mandated or required for merchants, but there will be additional costs to become EMV compliant. You the merchant have the choice to implement EMV in your business. EMV is not protection against all chargebacks, the liability shift only covers counterfeit and lost or stolen cards. Chargebacks due to service or questionable charges are handled as done before October 2015.

So how do you know if you should implement EMV standards in your business? Here are a few considerations: 

 Location and demographic

Are you located in an area were counterfeit or lost and stolen cards are often used in your business? Do you accept a lot of international cards?

Chargeback ratios

How many chargebacks occurred in your business within the last year? What were the reasons for those chargebacks?

Cost vs. risk

What is the COST to implement EMV standards in your business and does that cost make sense for your business’ RISK?

There are other considerations, too, including the training of staff, which is imperative because these cards are relatively new to the consumers as well as merchants. The transition is going to take a lot of patience on both sides.

Nevertheless, the EMV train has left the station. It’s time to consider getting on board.


Rev. 2/9/16


This article is an excerpt from the Handbook for Excellent Restaurant Operations (HERO), published by the Washington Hospitality Association.  Want a hard copy of the whole manual?  It’s one of the many benefits of becoming a member!  Find out more about joining the Washington Hospitality Association here.

View the Table of Contents




Categories: HERO