EMV is an international standard for payments and cash withdrawals made using credit and debit cards (such as Maestro and V PAY). Throughout the world, the magnetic strip is being replaced by the chip in order to meet the new standard. Consequently, some elements of the payment process are changing. For instance, the credit card user will now need a PIN code rather than a signature in order to complete a transaction. The name EMV is derived from the names of the founders of the initiative, namely the former Europay and the international organisations MasterCard and Visa.

Why EMV?
The most important reason for the change 'from stripe to chip’ is the large increase in fraud using traditional cards. A chip provides considerably better card security, because chips are very difficult to copy. Skimming and forging are almost impossible; as a result, you run a lower risk of fraud. You will lose considerably less time and money dealing with cases of fraud, which may in return lead to a substantial cost saving! The EMV standard also ensures global connections between payment systems.

The current position
Developments related to EMV are moving fast. This applies in particular to newly issued bank cards. Since the start of 2007, more than 60% of Dutch credit cards have been fitted with an EMV chip. In our neighbouring countries the introduction of the EMV is at a more advanced stage – the more secure bank cards with EMV chips have become common and POS terminals have been altered or replaced. This is causing fraudsters to concentrate on countries where the old style magnetic-strip POS terminals are still used – such as the Netherlands.

New rules
Under international provisions, with effect from 1 January 2005 the liability for this kind of fraud lies with the party who is not yet able to support EMV transactions. Every party in the payment chain has their own responsibility for implementing the necessary changes. PaySquare has had to adjust its processes and systems in line with the EMV standard. As of 20 July 2009, EMV fraud will be for the company's account and risk. EMV fraud is fraud that could have been prevented if the transaction had been performed using an EMV-certified POS terminal, the credit and/or debit card offered was fitted with an EMV chip and the EMV chip was used in combination with the PIN code when performing the transaction. If the company has an EMV-certified POS terminal, but the offered credit or debit card does not have an EMV chip, this will not qualify as EMV fraud. Naturally, the other acceptance rules and the PaySquare General Conditions for Card Acceptance shall remain in full force.

What does this mean in practice?

• You will need an EMV-certified POS terminal to complete an EMV transaction.  
• The credit card user will now need a PIN code rather than a signature in order to complete a transaction.  
• An EMV transaction is completed when the customer inserts the card (chip-side first) into the POS terminal and the PIN code is accepted online. This means that the magnetic strip is no longer swiped through the card-reader.  
• Identification is no longer required for EMV transactions, unless you have any remaining doubts about the cardholder’s identity. 
• EMV transactions require fewer checks, resulting in payments being processed more quickly.

Identification requirement
PaySquare has introduced an identification requirement for payments with credit and debit cards (like Maestro). If you do not yet have an EMV-certified POS terminal, you must always ask to see an identification document. Always check that the name and signature on the bank card correspond with the name and signature on the identification document. Note the number, type and origin of the identification document on the front of the transaction receipt. In the event of a fraud claim by the card issuer, you must be able to hand over the transaction receipt accompanied by identification details. If you are unable to produce that receipt, the costs of fraud will be passed on to you.

You can notify customers about this identification requirement by placing a notice on the counter. It must give notification of the identification requirement in no less than eight languages. These notices can be ordered free of charge through our website.

Since 20 july 2009, any accepting business that does not yet have an EMV-certified POS terminal will be responsible for fraud that could have been prevented by EMV technology. The identification requirement will cease to apply. However, PaySquare would advise you to keep checking identification details as a fraud prevention measure.

What should I do now?
The number of suppliers bringing EMV-certified POS terminals onto the market is continuing to grow. Contact your POS terminal supplier to find out more about the POS terminals that are currently available.