Yes, PayJunction supports EMV transactions. The PayJunction Smart Terminal supports:
- EMV cards
- Contactless NFC (Apple Pay, Google Wallet, Android Pay)
- Classic magnetic stripe cards
What is an EMV Transaction?
- EMV is an acronym for Europay, MasterCard and Visa. These card brands started the chip-based payment system. EMV cards have an embedded microchip on them, which is why they're also known as "chip cards" and IC cards (integrated circuit card).
- Rather than collecting the card data from the magnetic strip on the back of the card, the card data is collected from the microchip. The data on the microchip is encrypted and cannot be "skimmed" as it can be with the magnetic strip.
- Accepting chip cards is not a silver bullet for combating fraud, but it reduces the risk of accepting a counterfeit card (for face-to-face transactions, not e-commerce).
- Most NFC cards or apps (ApplePay or Google Pay) will only send the card number and expiration date; the cardholder's name is NOT provided. In these cases, transactions will display "VISA CARDHOLDER", or "VALUED CUSTOMER", or other generic name instead of the real cardholder's name.
Are Merchants Required to Use an EMV Device?
Merchants are not legally required to use an EMV device.
Merchants that are low risk for fraud can still accept EMV transactions, but they do not necessarily have to. For instance, medical offices accept payments from known customers that repeatedly visit the place of business. Fraud is not a major concern for this type of business, so EMV acceptance is optional.
Low-risk business types for EMV acceptance:
Medical offices, auto dealerships, photography studios, businesses with repeat customers.
Businesses operating a retail location that commonly experience fraud via counterfeit cards are encouraged to upgrade to an EMV device.
High-risk business types for EMV transactions:
Retail stores and businesses with non-repeat customers.
What Does the Liability Shift Mean?
- Liability Shift: Determines who is liable for the loss associated with a chargeback due to fraud.
- The liability shift for Visa, MasterCard, Discover and American Express occurred on October 1, 2015 (Pay at the pump gas station terminals: October 1, 2017).
- Merchants are liable for processing a stolen EMV card if the transaction is not processed with an EMV device. For example:
The card is processed as a regular swipe transaction (not EMV).
Accepting this type of fraudulent transaction can also be avoided by checking a photo ID to verify the cardholder. Do not accept a transaction unless the name on the card matches the photo ID.
- Card issuers (banks that issue cards) are liable when a merchant has an EMV device, but the fraudulent card does not possess a chip. For example:
- The place of business has an EMV device.
- The card is processed as a regular swipe transaction because it does not have a chip on it.
If a card does not include a chip on it, always check a photo ID to verify the cardholder. Do not accept a transaction unless the name on the card matches the photo ID.
- If a chargeback is filed, but both parties have EMV-capable devices (i.e. the merchant has an EMV device, and the cardholder has an EMV card), then the liability shift rules do not apply. In this case, standard chargeback procedures will determine who is responsible for the loss.
- If a chargeback is filed, but both parties do not have EMV capable devices (i.e. the merchant does not have an EMV device, and the cardholder does not have an EMV card), then the liability shift rules do not apply. In this case, standard chargeback procedures will determine who is responsible for the loss.
Chip and PIN vs. Chip and Signature
There are two ways to complete an EMV transaction.
- Chip and PIN is similar to processing a debit transaction. The customer inserts the card in an EMV-ready device, then provides a PIN to verify that he is the legitimate card owner. Ideally, merchants processing retail transactions use the chip and PIN process.
Chip and signature is similar to processing a credit transaction. The customer inserts the card in an EMV-ready device, then provides a signature.
Photo ID should be checked in order to verify the owner of the card. Verify that the name and signature on the photo ID matches the information on the card.
Does EMV Impact Keyed-In or E-Commerce Transactions?
Keyed-in and e-commerce transactions are not impacted by EMV. Acceptance of EMV-based transactions only applies to swiped (face-to-face) transactions. Any disputes that result from a keyed-in transaction will continue to be handled with existing chargeback procedures.