Definition and Acronym

EMV Stands for Europay MasterCard Visa

The EMV credit card standard is based on the name of the companies that originated it, being EuroPay, MasterCard, and Visa. However, all major card companies have signed on to using the secured protocol for next-generation processing, so while industry professionals may be using the term EMV, the accepted terminology is going to be "Chip Card" which is less brand oriented.

Added Encryption and Security

EMV Credit CardThe technology behind EMV cards has been around since the 1990s, and your author once actually built credit card machines designed for the European market back in 1997 that had this "smartcard" technology. Even back then, salespeople were telling people that the machines would soon be mandatory in the United States, but the goalposts got moved so often that here it is 17 years later and most devices can't read a chip card, and even if you had bought one that could it would not have been able to communicate with the network because terminals have to be programmed to use the reader, and then networks have to accept the encrypted data, and the dirty little secret of the processing world is that many ISOs and acquiring banks were running on the equivalent of vacuum tube technology in a microchip world when it came to card autorization. In the United States, credit card fraud has been an acceptable expense for big banks, though a bit devastating for victims of identity theft. Even so, when the total cost of upgrading would have soaked small business owners, everyone would have had to learn a different way to use credit cards, and banks would have had to increase bandwidth and technology, then the fact of the matter is that nobody was rushing to make changes until everybody learned what it is like to be part of a massive credit card breach.

EMV Implementation in 2014 and 2015

Visa and MasterCard unveiled roadmaps for EMV implementation in 2012, and a lot of the work had to be done on the side of acquiring banks, ISOs, MSPs and processors. For example, there was a 2013 deadline for networks to accept chip cards. You may have run across trouble if you tried to pay with a contactless card at a fast food place or big box store with a machine that had the contactless logo but was not in fact connected to accept the card except by swiping. The part of the roadmap that affects merchants is going to be the October 1, 2015 deadline where liability shifts for fraudulent cards as long as merchants have EMV readers in place. For gas stations with self-service payment devices outdoors, the deadline is 2017, because those readers cost a lot of money to replace.

The magnetic stripe on your card is not going away! If a salesperson tells you otherwise, he or she is either lying or misinformed. If a news article says so, it is due to lazy reporting and fact checking. Magnetic stripe technology may be 50 years old, but it is still used at service stations and automated kiosks, on ATMs, and in checkout lines. It could die off eventually, but killing it any time soon would make the card unusable, and credit card companies make their money by (1) charging usurious interest rates and (2) charging interchange fees to merchants for transactions. Anything that makes your card less convenient to use is verboten. If you remember the commercials for "check cards" in the 1990s with Daffy Duck and Shirley Maclaine, then you know that the concept was that you didn't even need an ID to spend money with a card, which played into the hands of card crooks everywhere. In fact, it was against card regulations for some time to even ask for identification with credit cards, so just about anyone could pick up a card and start making purchases. At some point, this was discovered to be a bad idea.

Another important note about EMV is that it may reduce in-person fraud at ATMs and checkout counters, but this means that "Card Not Present" fraud is expected to go up. There are some inroads into "3D Secure" verification for online purchases, which you may recognize as "Verified by Visa" but in reality people hate doing extra authentication on the Internet. In the UK, there are some accessories for online shopping which include EMV peripherals for computers that are plugged into a USB port, so at some point you may be plugging your card into a widget when you make online purchases. Still, MOTO sales and other avenues for fraud will still be out there. To paraphrase Jeff Goldblum, "Fraud...ah...finds a way."