EMV FAQ S FROM A MERCHANT S PERSPECTIVE

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1 EMV FAQ S FROM A MERCHANT S PERSPECTIVE WHAT IS EMV? EMV, or Europay MasterCard Visa, is a fraudreducing technology that can help protect issuers, merchants and consumers against losses from the use of counterfeit and lost or stolen payment cards at the point-of-sale. Consumer payment applications are held in a secure chip, integrated into the credit card. Unlike magnetic-stripe cards, every time an EMV-card is used for payment, the card chip creates a unique dynamic cryptogram transaction code for every transaction that cannot be used again. WHAT ARE THE BENEFITS OF CONVERTING TO EMV? Conversion to EMV will make transactions more secure and reduce the risk of fraudulent WHAT DO I NEED TO DO AS A MERCHANT TO PREPARE? Merchants will need a terminal or point-of-sale system that is EMV-capable. Please refer to your Sales Consultant for products and solutions that best meet your needs. WILL IT BE EXPENSIVE? For merchants who don t have EMV-capable equipment, purchasing new or upgrading existing terminals or POS systems will not be costly. There are many options today that are EMV-ready and also include Near Field Communication technology that can be used for Apple Pay. If needed, upgrading to new equipment now will position your business well for the EMV liability shift in October It will also be much less expensive than the cost of liability in the event of fraud. HOW IS A CHIP CARD DIFFERENT FROM A MAGNETIC STRIPE TRANSACTION? A chip card is a plastic payment card with a microchip that is virtually impossible to duplicate because every single purchase is assigned its own encrypted transaction data when the card is inserted into the device. Alternatively, when the magnetic stripe of a card is swiped through the device, data from the magnetic stripe is captured and included in the transaction request, and the same exact data is used for every purchase, making information easier to duplicate and steal. WHAT WILL THE ACTUAL CHECK OUT PROCESS BE LIKE NOW? A customer will insert their EMV-card into the bottom slot of a terminal. The card remains in the terminal for the duration of the transaction. The chip validates the transaction authorization data and the transaction amount. WHERE WILL THE LIABILITY NOW FALL? Liability for fraudulent transactions will move to the weakest link in the transaction. If a consumer uses a magnetic stripe in an EMV-capable terminal and the transaction turns out to be fraudulent, liability will rest with the issuer of the original magnetic stripe card. However, if a user uses a magnetic stripe card for a fraudulent transaction on a terminal which cannot process EMV, the liability for the fraud will rest with the merchant. WHAT DOES THE FUTURE HOLD FOR FURTHER CHANGES? Most EMV-capable terminals and POS systems will also be enabled to accept contactless payments, providing more convenience and payment options for customers, as well as faster checkout times.

2 MAKING A PURCHASE WITH A CHIP CARD 01 Insert the chip end of the card, chip side up, into the slot in the EMVready/chip-activated terminal. 02 Leave the card in the terminal while following the prompts on the terminal screen to complete the purchase. 03 Remove the chip card from the slot once the purchase is complete. The card must remain in the terminal throughout the entire transaction. The terminal will prompt the customer to remove their card. If you do not have a customer-facing terminal, your employees would follow the same steps that the customer would.

3 WAYS TO VERIFY THE OWNER OF THE CREDIT CARD If a customer has a card that does not have a chip, it will still work. The terminal will accept both magnetic strip and chip card 01 Have your customer enter a PIN. 02 Have your customer sign for the transaction. 03 No signature or PIN. (Small purchases) CHIP TAP SWIPE THREE WAYS TO PAY WITH DEBIT/CREDIT CARD The Liability Shift On October 1st, in-store card fraud liability will fall to the party that has not adopted chip technology. If a customer swipes a card with a magnetic stripe only at a magnetic stripe-only terminal, the merchant is not liable if the charge is fraudulent. If a customer uses a chip card at a magnetic stripe-only terminal and the charge is fraudulent, the liability will fall on the merchant because they did not invest in a new terminal. If a customer uses a chip card at a chip-enabled terminal and the charge is fraudulent, the card issuer will be liable not the merchant.

4 PROTECT YOUR BUSINESS WITH EMV TECHNOLOGY Need to be EMV-compliant before the October liability shift? Be EMV-compliant before the October liability shift! Partner with a processor who can help your business become more secure with the Xion 3.5 terminal. Xion3.5 Terminal Benefits EMV Compliance Easy Integration Improved Security Fraud Reduction Fast Performance Award-winning Support Extensive Range of Payment Options Xion3.5 Terminal Features EMV Smart Card Reader Contactless NFC Payments - Apple Pay TM - Android Pay TM - Google Wallet TM Color Screen Backlit Keyboard READY TO GET STARTED? CONTACT US TODAY!

5 EMV KEY DATES CHART VISA MASTERCARD AMERICAN EXPRESS DISCOVER APRIL Visa will extend the Technology Innovation Program (TIP) to merchants in the U.S., potentially allowing them to skip the annual PCI DSS validation for any year in which at least 75% of merchant Visa transactions originate from dual-interface EMV chip enabled devices plus other qualification criteria such as being PCI DSS compliant. Acquirers/processors will be required to support merchant acceptance of EMV chip PCI assessment relief takes effect. Acquirers and sub-processor mandate to fully process EMV Cross border Maestro ATM liability shift to non-emv ATMs. Processors must be able to support American Express EMV chip-based contact, contactless and mobile Discover will institute Fraud Liability Shift for Diners Club International. Discover merchant acquirers, acquiring processors, and merchants with direct connections into its network must be certified as able to support the network data needed in contact and contactless EMV chip card The mandate applies not only in the U.S., but also in Canada and Mexico. OCTOBER 2013 MasterCard Account Data Compromise (ADC) relief takes effect (50%). On this date, if at least 75% of MasterCard transactions originate from EMV-compliant contact and contactless POS terminals, the merchant is relieved of 50% of account data compromise penalties. Merchants will be eligible to receive relief from PCI Data Security Standard (DSS) reporting requirements if the merchants' point-of-sale (POS) acceptance locations, where 75% of their transactions occur, are enabled to process American Express EMV chip-based contact and contactless Discover will grant annual PCI audit waivers for merchants that process 75% of Discover Network transactions via terminals supporting both contact and contactless payments. OCTOBER 2015 The party that is the cause of a contact chip transaction not occurring will be financially liable for any resulting card present counterfeit fraud losses. Does not include automated fuel dispensers (AFD). MasterCard ADC relief takes effect (100%). On this date, if at least 95% of MasterCard transactions originate from EMV-compliant POS terminals, the merchant is relieved of 100% of account data compromise penalties. MasterCard liability hierarchy takes effect (excluding fuel). American Express will institute a Fraud Liability Shift (FLS) policy that will transfer liability for certain types of fraudulent transactions away from the party that has the most secure form of EMV technology. Discover will institute a Fraud Liability Shift (in U.S., Canada and Mexico). This Fraud Liability Shift policy will be a risk-based payments hierarchy that benefits the entity that leverages the highest level of available payments security. OCTOBER 2017 Deadline for automated fuel dispensers (AFD) to comply. MasterCard liability hierarchy takes effect for fuel dispensers. FLS takes effect for transactions generated from automated fuel dispensers. Fraud Liability Shift takes effect for transactions generated from automated fuel dispensers.