To reduce the risk of fraud, you should make sure that you are using EMV-compliant equipment to process EMV card payments. If you accept an EMV card using non-EMV compliant technology, you are liable for fraudulent transactions.
The card issuer is liable for fraudulent transactions in certain scenarios:
|Card used by the customer||Terminal available||Party liable for fraudulent transactions|
|Magentic stripe only||Magentic stripe only||Card issuer|
|Magentic stripe only||EMV chip||Card issuer|
|EMV chip||Magentic stripe only||Merchant|
|EMV chip||EMV chip||Card issuer|
If a cardholder inserts a chip card into an EMV-compliant device and there is a fault with the chip, the device prompts the cardholder to complete the transaction using the magnetic stripe on the card. This is known as a fallback transaction. As the device is EMV compliant and the cardholder attempted to complete the transaction using the chip, you are not liable for that transaction if it is fraudulent.
Why use EMV?
If you use EMV, you reduce the risk of credit card fraud and you help reassure your customers that their data and credit card information is secure.
How does EMV work?
An EMV card stores data in an embedded electronic chip rather than in a magnetic stripe. The chip allows more sophisticated communication between the card and the payment terminal, compared with a magnetic stripe transaction.
EMV cards create a unique code each time a customer uses their card. Each unique code directly relates to a specific transaction, which makes it easier to identify fraudulent transactions.
What do I need to tell my employees?
If a customer’s payment card has a chip, your employee should explain to the customer how to correctly complete the transaction. Your employees should tell customers:
- To dip their card rather than swipe it
- Not to remove their card before the transaction is complete
You should also prepare your employees for your customers’ questions. Employees should be able to explain:
- How EMV keeps the customers’ information safe
- That an EMV transaction may take longer than a swipe transaction, but it is more secure
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