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5 Myths About the EMV Transition Debunked

September 01, 2017

5 Myths About the EMV Transition Debunked

Just like you and me, business owners can spend too much time on the Internet. And often during these surfing sessions, we pick up a nugget of information from a website or a "friend," information that's not always completely accurate.

Even in the business community, well-meaning friends and colleagues pass along myths or half-truths. Most are harmless, but some have the power to influence behavior.

And like other big changes, myths about the EMV transition have been appearing, just when merchants have little time to waste in upgrading POS systems for the October 2015 start date. So take a page from “MythBusters” and help your clients get the truth about these five EMV misconceptions:

1. Implementing EMV is required and will be enforced by government or industry regulation.

There's no mandate for business owners to update to EMV-compliant POS solutions. No one will come knocking on the door or report you to the authorities.

Instead the EMV transition signals a liability shift from payment processors such as MasterCard and Visa. That means the least EMV-compliant party—either the merchant or the card issuer—will shoulder the responsibility when counterfeit cards are used at the point of sale.

Being on the hook for fraudulent charges could be much costlier than merchants can imagine. Is it worth it to take the chance?

2. If your POS isn't EMV-ready, you can't accept credit cards beginning October 2015.

Most businesses won't see a difference in payment processing between Sept. 30 and Oct. 1. Both EMV and mag stripe cards will be in circulation, and both EMV readers and MSR's can process credit and debit card transactions.

3. Transitioning to EMV is as easy as plugging in new payment terminals.

Though upgrading hardware at the POS is one of the first steps for business owners, it's not the only one. Updated software and improved connectivity are crucial in handling the new data elements in an EMV transaction.

That means ensuring solid interfaces between the card-accepting terminal and the POS, and the POS and the payment gateway or switch. The card reader needs updated software to guide consumers through the payment process, and each card brand (Visa, MasterCard, Discover, and American Express) requires a unique application or kernel to manage card functionality.

4. Mag stripe cards won't work in EMV readers.

Industry experts predict as many as 15 million MSR's in the U.S. must be upgraded or replaced as part of the EMV transition. And card issuers will need time to get new cards in the mail to consumers. That's why the first wave of cards will be hybrids, containing both an integrated microchip and a magnetic stripe.

When customers get ready to pay, software at the POS will guide them toward the most secure transaction available. If the terminal is EMV-ready and the customer has a hybrid card, he or she will be directed to insert or "dip" the card, rather than swipe. If the card has just a mag stripe, the EMV reader can still process the payment.

5. EMV protects merchants from data breaches.

Although many of the high-profile data breaches were helped in part by the limited security features of mag stripe cards, other factors were also in play. That's why business owners must understand that the EMV transition is not a magic bullet for data security.

EMV cards are much more secure than mag stripe cards because every payment transaction requires a single-use authorization code. And the integrated microchip helps card issuers more easily rein in counterfeit activity. But merchants should also take a look at their overall POS solution, plugging security holes as needed.

What other myths have you heard about the EMV transition?