Merchants Have 6 Months to Make Sure Their POS Terminal is EMV Certified

EMVWhat Does EMV Mean?

EMV, which stands for Europay, MasterCard and Visa, or more commonly known as Chip and Pin technology is coming to Canada.  Already adopted in over 80 countries all over the world, this is proven technology that has had a high success rate in helping to mitigate fraudulent activity.

EMV  leverages a microchip at the top of your credit and debit card.  Think of this chip like a small computer processor which stores your information in an encrypted format.  When the chip is inserted into a chip enabled POS terminal, the terminal reads the chip and requires your PIN (Personal Identification Number) in order to complete the transaction.  This combination greatly enhances the security of the transaction as it is extremely difficult to compromise this information.

It was 2003 when the card brands first committed to bringing Chip and Pin to Canada.  They had originally set a due date for all merchants to be “chip-enabled” for Visa and MasterCard by October 2010.  They issued a Liability Shift for fraud coded chargebacks.  This meant that, as a merchant, if you were not chip enabled by October 2010, any fraud coded chargebacks you received after this date, regardless of whether or not you did your due diligence in verifying signatures and authorization numbers, would not longer be the responsibility of the issuing banks.  The liability for these chargebacks would now rests solely on the merchants.  And the merchant would not have the opportunity to dispute these chargebacks.  Interac set their due date a little further back to the end of 2015.  However, because chargebacks do not exist with Interac transactions, instead of a liability shift, a merchant who was not chip enabled would simply not be able to accept any Interac debit transactions after December 2015.

But where is EMV?

As a consumer, you might have already received your Chip card in the mail and while you can certainly use it as the odd merchant location, you may have noticed that major retailers have yet to convert.

A standalone terminal is easy to convert.  The terminal manufacturers complete their certification and each Acquirer ensure that the terminals within their product line are properly certified and tested to their host.   They can then swap out the terminals within their portfolio within the specified time.

As it turns out, EMV certification for integrated merchants has proved to be much more challenging than anyone had anticipated.  What was originally thought to be possibly a 6 month certification process, had some of the early adopters running into 12 to 18 month projects.  With several different parties (for both hardware and software) to organize and contribute,  some merchants are only now starting to see the completion of these projects.

EMV Extension

And as such, Visa and MasterCard Canada listened.  They’ve extended the deadlines to March 31, 2011.  Merchants now have an extra 6 months to get chip and pin enabled.  Interac’s deadline remains unchanged however, most merchants are going through certification for all three card types at the same time.  It won’t be long until Chip and Pin is accepted norm.

Need a New Certified POS Terminal?

If your POS hardware is not up to EMV standards then this make a good time to shop around and get some merchant account quotes from competitors before you acquire this newer technology.

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Matthew Hunt has been helping small businesses get set-up with Canadian Merchant Account Services since 2007 and helped 1000's do so. Join Matthew on Google+.

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