In the wake of increasing data breaches, the topic of EMV cards is becoming more prominent.  But what are EMV cards, why are they making a buzz and how should merchants prepare for them?

EMV, which stands for EuroPay-Mastercard Visa, has long been in-use in European and Canadian cards. Instead of a magnetic stripe on the back of the card, EMV cards contain a microprocessor chip that stores cardholder data. This chip holds information in dynamic ways, making it hard for someone to obtain the cardholder information; unlike magnetic stripe card information which can easily be gathered with a simple and inexpensive card reader.

In the case of the recent data breaches that have occurred this year, customer data was taken not from card terminals, but from a store database that contained customer information – including their card data. EMV cards are making a buzz because the card data will be harder to decode if a fraudster pursues it.

Merchants will gain the most talked about benefit – a shift in liability. In order to accept EMV cards, every business in the US with a magnetic swipe terminal will need to convert to a terminal that accepts EMV cards. Depending on the type of terminal, instead of swiping a card, customers with either wave the card in front of a terminal or insert it in to a slot and then be asked to confirm the transaction with a PIN number or a signature.

If an EMV card were presented to a merchant not equipped with EMV terminals, liability for counterfeit fraud may shift to the merchant’s acquirer. Merchants will also be responsible for CNP [Card Not Present] fraud unless participating in authentication programs enhanced by EMV.

Making changes to accept EMV cards will not only protect merchants from liability, it will enhance the safety of the customers’ buying power and productivity will rise. Merchants will be able to save expenses by replacing signed paper slips with electronic records, which further simplifies the handling of fraud – particularly with chargeback requests.

The US is the last major market to convert to EMV cards. Visa and MasterCard are implementing the shift in all US stores by October 2015. For businesses, the terminals, in many cases, are available or will be soon. And banks that issue cards should already have EMV cards to issue to customers who travel overseas. A complete list of card issuers that have announced plans to issue EMV cards can be found on

The change will only effect POS retailers. To prepare for the upcoming change, contact your payment processing provider as soon as possible and they can set you up with the appropriate information and equipment. For more on this topic, visit