According to a recent study conducted by Fiserv, 28% of people surveyed don’t understand what EMV is or what benefits it carries.  Traditionally, consumer cards utilize a magnetic strip on the back of the card; however, this method has become antiquated and susceptible to widespread fraud.

In 1993, the concept of EMV was born, and has since become the standard in Europe and Asia.  EMV technology is different from magnetic stripe cards in that the data stored on the chip is dynamic.  Basically, this means that the data stored on the chip changes for every transaction, making it next to impossible to counterfeit, rather than magnetic stripe cards that hold static (unchanging) information that can be “skimmed” by numerous methods for easy replication.


Unfortunately, the United States was slow to adopt this technology, and because of that, in 2014, the U.S. accounted for less than a quarter of all card transactions worldwide, but reported more than half of all card fraud.


What does this mean for consumers?


More than 1.2 Billion cards are in the midst of being replaced in the United States.  Issuing Banks began distributing these EMV enabled cards (in conjunction with the magnetic stripe) years ago to their clients who travel internationally, and now are cycling through replacing all other cards.  This slow roll out of these cards will take some time, and merchants can expect to see a growing number of consumers presenting an EMV Enabled Cards over the coming years.  It is projected that by Quarter 4 of 2017, there will be 90%+ adoption of EMV cards in the U.S.


What does this mean for Medical Practice merchants?


Where most the confusion seems to be coming from is the term “liability shift.”  Boiled down, if the merchant accepts an EMV enabled card as payment, processes it via a traditional magnetic strip method, and the charge comes back as fraudulent, the merchant will be responsible for the losses.  This is a broad generalization, and there are caveats specific to each major Card Network, but ultimately, if the merchant has the opportunity to process a transaction via EMV, and does not, then they run the risk of having to take the hit should they encounter fraud.


It was estimated that a mere 27% of merchants would be ready for the liability shift by the October Deadline, although since the deadline has passed, it is widely assumed that the real number was much lower.  What makes this new landscape even more difficult for merchants to navigate is the bottleneck that is occurring at a level out of the merchant’s control; all EMV enabled terminals, gateways and other associated equipment that handle EMV data must be individually certified, and there is a backlog of requests making true EMV solutions very hard to find.  Many Merchant’s current payment systems whose EMV solutions are not ready must choose between switching service providers to an EMV Capable System, or waiting for their current set up to gain certification, running the risk of incurring fraud in the meantime. For more information please contact moc.etagraelcnull@troppus.