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Why EMV Matters and How to Stay Compliant

A guide to the importance of EMV technology and how remaining compliant can benefit your business.

June 24, 2019

If you’re one of the more than 3.5 million U.S. stores that now accept EMV cards (sometimes called chip cards), chances are you’re up to speed on EMV technology and understand how it can protect your business from becoming liable for credit card fraud. If not, here’s a quick recap:

What is EMV?

If you look at the credit or debit cards you currently own, you’ll most likely notice that they have a small square chip imbedded them. Those are EMV cards, and they get their name from Europay, MasterCard, and Visa — the companies who originally conceived of the technology.

When EMV cards are used (or “dipped”) in an EMV card reader, they help to greatly increase your protection against card-present fraud. Unlike traditional magnetic stripe (mag-stripe) cards, EMV chip cards encrypt your data, obscuring your actual credit card information from potential threats. According to Fundera, this process is called “tokenization.”

The EMV card generates a random sequence of alphanumeric strings for each purchase, making it nearly impossible for someone to trace that transaction back to your specific account, and that protects you from fraud.

So, it’s clearly safer for customers, but you might still ask yourself: Why do you need to make EMV payments available at your store? After all, that could involve costly upgrades POS system.

Great question. The simple truth of the matter is that in October 2015, there was an EMV liability shift that made retailers responsible for fraudulent charges if they hadn’t upgraded to EMV technology — and for good reason.

To learn all about the U.S. EMV liability shift, check out U.S. Payment Forums’ deep dive here.

Why Did EMV Become the Standard?

Picture this:

It’s early 2015, and you’ve just gone into your local bank to get a new credit card. When the clerk returns with your mag-stripe card, they say:

“Okay, you’re all set! Here’s you new card. It’s using technology that was developed 50 years ago (in the 1960s), and your exact payment and transaction information is stored inside at all times. Every time you use it, there’s a chance someone could steal your info. Oh, and before you go, take a look at these statistics.”

She then slides a flyer forward that cites Nasdaq statistics that show just how bad credit card fraud has become in 2015.

  • 31.8 million U.S. consumers had their cards breached in 2014
  • The U.S. is responsible for 47.3% of the world’s credit card fraud
  • The U.S. loses more than $5 billion in card fraud each year
  • For fraud victims that suffer direct financial loss, the average is over $7,000
  • 46% of Americans have had their card information compromised at some point in the past five years

Clearly, if you were presented with these facts, you’d be unsatisfied and demand a more secure method of transaction — and that’s exactly what EMV offered.

The Results

After implementing EMV technology, the U.K. saw a more than 60 percent reduction in counterfeit fraud, and the U.S. knew they needed to do the same. With its advanced encryption technology, it had the potential to drastically reduced card-present fraud across the country.

That’s why the 2015 liability shift deadline was put in place — to encourage U.S. retailers to adopt EMV technology, both to protect themselves from liability, and to help protect their customers from fraud.

The good news is that this push for EMV adoption worked. According to Visa, counterfeit fraud dollars have dropped by a whopping 76% since 2015 for those merchants that completed their chip upgrade. With 509 million active Visa chip cards across the nation, and with 75% of U.S. storefronts now accepting chip cards, the facts are clear — EMV helps prevent card-present fraud.

The Challenge of Compliance

So, if liability is placed on stores that choose to forego upgrading to EMV technologies, and if it’s clear that EMV helps protect those stores’ loyal customers from fraud, why have 25% of U.S. businesses yet to make the jump?

As it turns out, more than half of businesses say that it’s due to the cost of upgrading their technology. While it’s true that there is a cost associated with the transition, it can be as low as $100 or less for one or two payment terminals. Even for small businesses, the EMV upgrade should be well within budget, especially when compared to the potential risk of thousands of dollars in liability associated with traditional mag-stripe readers.

For other businesses, they may see the transition as time-consuming or complex, but in truth, upgrading to EMV is as simple as updating your payment terminals and POS system. When you partner with a technology provider that understands EMV compliance, that upgrade can be performed efficiently enough that it has little to no effect on your business’s day-to-day operations.

Compliance for Financial Institutions

Though compliance can be fairly simple for retailers, the story looks a bit different for banks that go live with EMV. Even now, nearly four years after the EMV liability shift, banks are still adjusting to the many compliance deadlines, certifications, and expectations from customers surrounding the technology.

Maintaining EMV programs requires meeting stringent certification requirements and a constant effort to update and test systems to ensure security. While this may be a challenge for some banks, it’s the new norm. And, according to BAI Banking Strategies, there are a few ways to make the process run more smoothly.

  • Eliminate decades-old testing systems
  • Upgrade legacy tools to more efficient, powerful applications
  • Stop relying on manual processes

By upgrading testing systems to incorporate cutting-edge tech like automation and virtualization, banks can drastically improve their overall process, boosting code coverage, enhancing accuracy, and enabling collaboration in ways that legacy systems simply can’t match. EMV should be seen as a boon to the security of the financial industry, not as a bane to the lives of bankers everywhere. Next-generation testing solutions can help make that a reality.


EMV technology has seen exponential growth and adoption in the U.S. since 2015, with 97% of all Visa payments in 2018 coming from EMV cards — and that number will only continue to rise. If you haven’t already upgraded your system to EMV, it can be a simple, affordable process.

Becoming EMV compliant can help build trust with your customers by showing them that you value their protection against fraud. Plus, you’ll help protect your own business from liability if card-present fraud does occur. After all, for the foreseeable future, EMV is here to stay.

Learn more about how your business can make this technology in the white paper, “From Chaos to Confidence: Mastering Instant EMV Issuance.


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