Hi All,
We just sent this out in our weekly NETbilling news and thought we would share with everyone. It has been a hot topic of conversation in the financial world as enforcement goes live in the US starting October 1.
What Is EMV And How It Effects All Retail And E-commerce Merchants
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What Is EMV?
EMV stands for: Europay, MasterCard, Visa. This is the chip based technology now being used by credit card issuing banks into credit and debit cards. It is virtually impossible to duplicate these chip cards. International market migrations to EMV chip have proven that chip cards help reduce counterfeit fraud significantly. Although the magnetic stripe is still on the card itself, the EMV chip is secure and encrypted when used with the chip, rather than "swiping" the card. With security flaws in the current non EMV enabled system, the ability to steal a card or forge a signature is quite common. Technology has even become available on the black market for both reading and writing the magnetic stripes, making cards easy to clone and use without the owner's knowledge.
EMV has been prevalent in Europe and other countries form some time now with great success in retail fraud reduction. EMV adoption in the USA has been slow. Until the major card data breaches over the past couple of years here in the US from Target, Home Depot and others, there was no clear date for implementation in the United States, until recently. As of October 2015, over 500 million EMV compatible credit and debit/bank cards will have been issued to US citizens. Chances are you already have one in your wallet.
How Will EMV Implementation Effect E-commerce Merchants?
The shift to EMV compatible terminals in the USA for retail stores will certainly reduce card present transaction fraud. However, there is little doubt that as a result, online fraud will increase significantly. The payment card networks will shift liability for fraudulent transactions to the party to a transaction that has failed to deploy EMV technology, whether its the the card issuer or the merchant. That is intended to pressure both card issuers and merchants to make the investments necessary to move to chip card technology. This begins October 1, 2015.
In other words, if fraud happens on a credit or debit card and the merchant is not EMV-enabled, they could be liable for that charge and associated fees. So what does this mean for online retailers, adult and mainstream, in the U.S.? With in-store transactions presumably safer as more consumers use EMV-enabled cards, criminals will surely increase their efforts at targeting online retailers. In the E.U. and Australia, online fraud has increased 10 percent since they have implemented EMV.
This is an important reason for online merchants to tighten up their fraud controls using NETbilling's Fraud Defense tools.
Read the full writeup here:
EMV & How It Effects You!
Thanks, Mitch