Visa and MasterCard have announced an October 2015 mandate, referred to as EMV, that essentially requires their merchants and issuing banks to comply with acceptance of the new “smart chip” cards, by updating their card acceptance equipment to read “chip cards” and provide encrypted key pads. For more information on this “Chip ‘n’ PIN” requirement, please see this Wall Street Journal article: “October 2015: The End of the Swipe and Sign Credit Card”

Toward this goal, the EASYPAY kiosks and card terminals needed to be redesigned in order to accommodate new card readers, PIN pad and “tap & go” readers that will work with various mobile phone payment systems. Likewise, this new equipment is being certified for EBT card processing as well.

The U.S. is the last major market to still use the old-fashioned swipe-and-sign system, and it’s a big reason why almost half the world’s credit card fraud happens in America, despite the country being home to about a quarter of all credit card transactions.

Tom Gara, Wall Street Journal-Financial Services Blog

BCC Payments LLC, Standard Change’s partner in the EASYPAY system, has been working closely with the credit card processor for EASYPAY – CardConnect – on this new card acceptance package. CardConnect has been working to get the components certified for PABP compliance, or as we often refer to it: “PCI compliance”.

According to the Wall Street Journal article above, the new smart chip card will completely eliminate mag stripe & signature transactions. The new method will have personal data embedded in the microchip, and customers will insert the card and enter a PIN via encrypted keypads for verification. This system is more secure, preventing fraudulent credit card transactions, and has been successfully implemented in several European countries where credit card fraud was rampant under the old swipe & sign system.

The key issue for merchants with the October 2015 mandate is the “liability shift” on fraudulent card transactions. Merchants will still be allowed to accept credit cards under the swipe and sign system. But they will be fully liable for any card fraud that occurs at their business. However, if the merchant updates their equipment and is compliant for Chip and PIN transactions, but the issuing bank of the credit card is still issuing mag stripe only cards, the bank will be fully liable for the fraudulent charge. Liability is shifted to the party with the least amount of fraud prevention technology.

A separate goal, according to Visa and MasterCard, of the new system is to help open the technology to other forms of payment that will still be secure using the microchip-enabled technology – such as contactless, near field transactions using key fobs, mobile phones and the tap & go systems that have been around for some time, but have not been full adapted by a majority of merchants.

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