The New Standard of Protection

The New Standard of Protection
EMV Chip Card technology
is the new industry
standard in the U.S., as it
makes the acceptance of
card present payments
more secure.
The New
Standard of
EMV Chip Card Technology
With the total cost of fraud in the U.S. estimated
at $8.6 billion per year, preventing fraud growth
has become a priority. In response, all the
card processing networks have committed to
migrating to EMV chip technology, which means
that before long, it’s likely your customers will
be presenting a new type of payment card
– one with an embedded smart chip. EMVenabled cards (chip cards or smart cards) have
an embedded microprocessor chip that stores
cardholder data and creates a unique digital
signature for each transaction.
Bank of Guam will be converting to EMV. To
make the transition to EMV as smooth as
possible, Bank of Guam offers this simple guide
for merchants to prepare for this change.
(671) 472-5300
EMV Chip Card technology is the industry
standard in the U.S., as it makes the
acceptance of card present payments
more secure. Launched by EuroPay,
MasterCard® and Visa® and adopted by all
major credit card brands, chip technology is
currently in use or is being implemented in
more than 80 countries.
ƒƒThe major credit card brands all set multi-year
deadlines in 2011 for credit card processors and the
retailers they serve to transition to EMV.
ƒƒAs of Oct 2015, merchants are liable for any
counterfeit and stolen card fraud that may occur
unless their terminals are EMV-compliant. This is
commonly referred to as the “fraud liability shift.”
*For any questions on the fraud liability shift, please visit the nearest
branch to speak to a BOG officer or call Card Services at (671) 472-5187.
Q. How does EMV Impact the merchant?
A. In order to process Chip Cards, the merchant’s terminal needs to be
EMV-enabled. In the coming months, Bank of Guam will be reaching out
to all its merchant customers to schedule the upgrade of their terminals.
Q. Will there be a change in the processing of Chip Cards?
A. Yes. With Chip Cards, customers and merchants will no longer swipe
the card. Instead, the Chip Card must be inserted into the terminal
card reader and kept there for the duration of the transaction until
prompted to be removed. Because this is a significant change from the
current process, Bank of Guam will ensure that merchants and their
employees are properly trained on the new procedures.
Stands for Europay,
MasterCard & Visa
Q. If my terminal is chip-enabled, what happens if the Chip
Card is removed too soon or if the Chip Card is swiped and
not inserted?
A. If the Chip Card is removed from the card reader before being
prompted by the terminal, the transaction will not be able to complete
the authentication process. This will result in the cancellation of the
transaction and the non-completion of the sale. If the Chip Card is
swiped and not inserted, the terminal will prompt you to insert the card.
Q. If the terminal is not chip-enabled, can the merchant
accept Chip Cards?
A. Yes. Because most Chip Cards also have a magnetic strip on the
back, they can be used at a terminal that is not yet chip-enabled by
swiping the card in the traditional manner.
Q. If the terminal is already upgraded and chip-enabled,
can the merchant still accept cards that are not chipenabled (i.e. cards with only magnetic strip)?
A. Yes. Merchants with terminals that are already chip-enabled can
continue to accept non-chip cards or cards with only a magnetic strip.
These cards have to be swiped in the traditional manner.
Q. Does EMV technology provide the same protection
to merchants for card-not-present transactions such as
online purchase or Mail order Telephone Orders?
A. The enhanced security features of Chip Cards are only applicable
with card-present transactions, where a Chip Card is in contact with
a chip-enabled terminal. If a card transaction is done online or taken
over the phone, the same risks apply as if the card were a magnetic
strip card. Merchants who accept card-not-present transactions
should follow their established procedures and controls in verifying
the transaction.
Q: Will the new EMV-compliant terminal be different from
what merchants are currently using? Will there be an
additional cost?
A: No. The EMV-compliant terminals are the same models that
merchants are currently using. What will be upgraded is the software.
There will be no additional cost for the upgrade.
Q: Will travelers with chip-enabled cards visiting the U.S.
have issues paying for purchases if the US merchant is
not yet EMV-compliant?
A: Almost all chip-enabled cards have a magnetic strip, so they can
be used in countries that have not yet deployed EMV, such as the US.
However, if the issuing bank disables the magnetic strip feature on their
cardholders’ Chip Card, that card will not be read in a non-EMV terminal.
Q: What is the difference between contact
and contactless Chip Cards?
A: Contact EMV cards refer to cards with microprocessor chips that
need to be in contact with an EMV-enabled ATM or terminal reader
throughout the transaction in order for the chip to be read. Depending
on the issuing bank, some Chip Cards also have a “contactless”
functionality where the chip can be read by simply tapping a
contactless-enabled terminal, typically for small purchases and at
stores with quick checkout counters.
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