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The Clock is Ticking on EMV Transition - Are You Ready?

A new card processing technology based on microchips instead of magnetic stripes is coming. It’s time for businesses to make the leap to the new technology.

If your business accepts credit and debit cards for payment, you need to be aware of a major change that’s coming to card processing in less than a month. Beginning October 1, liability for fraudulent card transactions could shift from your bank to your business if customers present new EMV credit cards for payment but you have not installed EMV-capable terminals at your point of sale. If you have not yet done so, it’s time to make the leap to the new technology.
EMV stands for Europay, MasterCard® and Visa®, which is a new type of card processing technology that’s based on microchips instead of magnetic stripes, wherein a small credit card chip is embedded. Card issuers are in the process of replacing the estimated 600 million to 800 million mag stripe credit and debit cards in circulation in the U.S. with new cards embedded with an EMV microchip.


A Little Background on Credit Cards with Chips

Many European nations adopted EMV back in the 1990s, and most countries now have migrated away from mag stripe to chip-embedded cards. The U.S. is the last major world economy to make the switch. Plans to migrate to EMV credit cards have been in the works for some time, but recent headline-grabbing hacks at such major well-known retailers have added urgency to the transition. In fact, the cost of credit card fraud rose by 39 percent from 2013 to 2014.

This is because EMV significantly boosts cardholder data security by replacing the old mag stripe with a computer chip. Unlike mag stripe cards, it is extremely difficult for hackers to duplicate chip-embedded cards. Even if thieves are able to steal cardholders’ payment information, it is not useful to them because they cannot create new microchip-embedded credit cards.

With EMV, customers will insert their cards into a special microchip reader at the point of sale, instead of swiping them like they do mag stripe cards, and then either sign or enter a PIN (thus the term “chip and PIN credit cards” sometimes used to describe EMV). EMV also utilizes other security techniques such as encryption and tokenization, and all EMV payments are unique transactions. In other words, the payment data is dynamic and changes with each payment, making each transaction even more secure.

Many industry experts believe that EMV’s combination of card validation using a microchip and user authentication via chip and PIN provides the greatest protection against various type of card-present fraud. This includes the fraudulent use of lost, stolen and counterfeit cards as well as card skimming at ATMs. Also, EMV is compatible with card security standards around the world.

Upgrade Your POS Equipment

Now is the time to talk to your bank or your merchant card processor about upgrading your POS equipment and infrastructure so you will be able to accept EMV cards presented for payment by the October 1 “liability shift” date.

There also are other benefits to upgrading to EMV-capable terminals that go beyond not being liable for fraudulent card-present transactions. For example, many customers today want to take advantage of near-field communication (or NFC) technology that lets them make contactless payments with their smartphones. Upgrading to a new dual-interface EMV-capable terminal will enable your business to offer this payment option to your customers at the point of sale.

Please contact a Cadence Bank treasury management representative to discuss upgrading to EMV-capable POS terminals if you haven’t done so yet.

The switch to EMV ensures your customers and business will have greater protection against fraud. Stay up-to-date on fraud prevention techniques to help safeguard your company and keep it running smoothly.


This article is provided as a free service to you and is for general informational purposes only. Cadence Bank makes no representations or warranties as to the accuracy, completeness or timeliness of the content in the article. The article is not intended to provide legal, accounting or tax advice and should not be relied upon for such purposes.

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