Chip-enabled cards are now available in the United States after years of use in other countries around the world. EMV, the new credit card payment standard, is meant to make credit transactions more secure. “EMV” stands for Europay, MasterCard, and Visa, who are the developers of this standard. Although EMV does not represent Discover or American Express in its name, the two are also participants in the new payment standard.
On October 1, 2015, all credit card companies transitioned to chip-enabled cards and have made them available to their users. In the past, liability risk for fraudulent transactions was placed upon the credit card issuer. However, after October 1, 2015, if the merchant has not updated their card reading technology, the merchant will assume all fraud liability for payments made using a magnetic stripe card reader with a chip-enabled card.
For our QuickBooks clients who utilize the Intuit GoPayment, Intuit has announced they will extend the EMV liability shift by six months for its QuickBooks Payments customers. The extension is intended to allow additional technology transition time. Intuit will cease to assume fraud liability for any purchase administered by a chip card processed via a magnetic stripe on March 31, 2016, and the merchant will then assume all fraud liability.
EMV cards feature “smart chips,” which encrypt data for every sale, making card transactions more secure. The cards are designed to be inserted into the reader and remain in place throughout the entire transaction. Rather than utilizing a magnetic stripe which can be easily cloned, the chip provides a one-time transaction code, decreasing the simplicity of duplication. When processing a transaction by means of a chip-enabled card, payment details are stored and can be referenced by noting their unique code.
While magnetic stripe cards are not extinct, nor will they be in the near future, their modern counterpart is significant. EMV cards require updated processing technology in order to avoid the transfer of fraud liability from the credit card issuer to the merchant.
For assistance with ordering a new EMV chip card reader, contact a member of the Yeo & Yeo Client Accounting Software Team.