Collections and receivables

• EMV, or EuroPay, Mastercard, and Visa, is the global standard for card present payment processing technology — and it’s coming to the US.
• EMV uses an embedded chip in the card that holds the same cardholder information that’s stored on the magnetic stripe and more.
• This “smart card” technology provides an additional form of card authentication for the transaction — providing better validation of the legitimacy of the payment type being used and helping reduce the use of counterfeit payment cards at retail points of sale.
• The EMV chip helps protect you from card present counterfeit transactions, but not those made with a lost or stolen card. You’ll still need to ensure you verify the identity of the person presenting the card for payment.

EMV-enabled cards, or smart cards, have an embedded secured microprocessor chip that stores cardholder data and creates a unique value for each processing transaction. Smart cards come in three forms:

• Contact Cards are inserted into a card reader for transaction authentication and must stay in the terminal for the duration of the transaction, which ends when the receipt is printed.
• Contactless Cards (aka “Tap-and-Go” cards) use a radio frequency and a nearby (within a few inches) contactless–capable reader for transaction authentication.
• Dual Interface Cards combine contact and contactless technology and use dual interface terminals for transaction authentication.

• EMV is the best existing technology in use today to authenticate cards and cardholders ensuring that a card is not a counterfeit or “cloned” card. The embedded chip generates a one-time value to make each transaction unique — known as dynamic authentication.
• Magnetic stripe data is static; the data is the same each time the card is used at all terminals and is easily “cloned.”

• Customers who are unfamiliar with chip-based cards will need to be trained on how to insert or tap their cards in or over the device.
• Employees will need to understand these new procedures in order to help customers and to explain the security benefits as customers ask questions.

In October 2015 the financial liability shifted from card issuers to retail merchants for counterfeit fraud card present transactions. In October 2020 the financial liability will shift for petroleum pay-at-the-pump merchants, if only the magnetic stripe authentication is used when the card is EMV capable.

Yes. Chip cards will have the embedded microchip and the magnetic stripe. However, you’re subject to the liability shift for card present counterfeit fraud transactions.

An EMV-enabled terminal will have a slot where the smart card can be inserted, a contactless radio frequency reader or both. Ask your bank representative if your terminal is EMV ready.

Dual interface terminals are able to process chip transactions from various payment products including contact or contactless chip cards, mobile devices and wallets and magnetic stripe cards.

There are two components, the terminal device and the application it uses to read the card. EMV certified terminals have the ability to communicate with the chip card via contact or contactless. The application drives the device, allowing it to authenticate the chip card and cardholder, as well as authorize the transaction either online with a PIN or offline with the chip.

Yes. Some terminals can be upgraded to fully support EMV transactions with only a peripheral device versus needing a new terminal. Zions Bank will provide additional information on what you may need to be EMV capable as it is available.

Not at this time. The card brands have not announced any new interchange categories for EMV card acceptance, so the transactions will qualify at the current rates.

Yes. You'll need to download a new application to read smart cards on EMV capable terminals.

As EMV technology is adopted in the card space, it’s expected that fraud will also shift to the least secure channels, including CNP. From an online fraud perspective, it’s important that CNP businesses be prepared for this anticipated shift. Strategy is key, and it’s essential that you take the extra measures to know good customers and good customer behavior beyond just Address Verification Service (AVS) and Card Validation Values (CVV). 

With EMV, the Associations will have new chargeback codes. For Visa, a 62 code is for a Counterfeit Transaction dispute and an 81 code for Fraud, Card Present. Mastercard also has two codes. For Counterfeit Fraud, you will see a 4870 code, but a never-received-as-issued (NRI) fraud dispute will be a 4871 code.

While there are a few virtual terminal card readers on the market, manufacturers continue to develop “future-proof” EMV-enabled devices. As the liability shift date approaches, Zions Bank will provide more information as it becomes available.

The EMV liability shift affects all card present transactions. So, there is no distinction made if you accept cards using a smart phone or tablet.

There are no unique EMV requirements for cash back transactions. However, the same liability shift applies like all other card present transactions.

The card brands vary on their requirements, but to be fully prepared, you will want an EMV device that can process chip and signature, chip and PIN, and contactless payments.

Yes. PCI-DSS compliance is mandatory for all merchants.

Talk to your Zions Bank representative and begin assessing what a chip card payment migration plan would look like for upgrading or replacing all consumer facing POS devices.