EMV Compliant Chip and PIN Technology in Canada

Accepting Chip and PIN credit and debit cards (a.k.a Integrated Circuit or Smart Cards) is a big change for businesses. Recently released in Canada, the use of chip-compatible terminals is quickly becoming standard for merchants across the country. Already used in the UK, this technology has helped decrease credit card fraud.

What is Chip and PIN technology?

Chip and PIN technology, as opposed to older magnetic stripe cards, use a microchip on the card to store the customer’s information. A four-digit PIN verifies your identity instead of requiring a signature. In order for transactions to be approved, the PIN must match the one on your card’s chip.

Chip and PIN card systems are based on the EMV (Europay, MasterCard, and Visa) standard, originally established by members of these companies. These standards enforce the use of EMV certified Point of Sale (POS) terminals. EMVCo, LLC, the organization that maintains these standards, offers evaluations and certifications to companies using more secure EMV compliant card terminals.

Benefits of Chip and PIN technology include:

Increased speed of transactions

This technology speeds up transactions by not requiring customers to sign a receipt or ever have the card leave their possession. Less time waiting for customers in front of you in line to pay for their purchases.

Increased security for customers against fraudulent transactions

The card never needs to leave the sight of the customer. Businesses either bring the card reader to the customer or they insert the card themselves into POS terminals and enter their PIN, minimizing the opportunities for skimming. If your card is ever stolen, the PIN is still needed to make a transaction, not just a forged signature, saving you worry about someone easily accessing your account.

How does switching to Chip-reading terminals impact your business?

Businesses need to update software and hardware to be EMV compliant

Some merchants find that their recently purchased POS terminals are not EMV compliant. Speak with your payment processor to see if your terminals follow EMV standards, otherwise, see if you can upgrade to compliant POS terminals without breaking your contract.

What if your business is not EMV compliant?

If you wait to upgrade to EMV compliant devices, here are some things you need to consider:

1. Merchants without EMV compliant devices will soon be liable for the cost of any credit card fraud that could’ve be avoided if their business used Chip & PIN terminals.

2. After December 2012, magnetic stripe cards will no longer be accepted at ATMs.

3. After December 2015, magnetic stripe cards will not be accepted at any point of sale.

Merchants should evaluate their current payment processing system and plan to become EMV compliant as soon as possible, depending on your contracts. It may be more cost-effective to already make the switch to comply with current security standards. If you have questions about EMV compliant devices, contact Kubera for answers.