1. KEY FACTS ABOUT EMV
EMV (“Europay International, MasterCard, and Visa”) is a set of standards for interactions between chip cards
and point-of-sale (POS) devices. Essentially, EMV, chip cards, and smart cards all mean the same thing.
EMV helps prevent payment card fraud via an additional layer of security provided by an embedded microchip.
Many regions across the globe have already implemented EMV, including Europe, Canada, Latin America,
and Asia. The United States is now actively taking steps to support EMV, and is one of the last major countries
to do so.
The Key Components
The Chip Card
A chip card or smart card is simply a regular credit or debit card with the addition of an embedded
microchip. The microchip provides capabilities not found in regular magnetic stripe cards, including
two-way communication with the EMV-capable terminal.
The EMV-Capable Terminal
EMV-capable terminals have a slot on the top or bottom where the chip card is inserted or “dipped”
into the terminal. However, in order to process EMV transactions, the software application on the
terminal must be certified by the processor to support EMV. In other words, just because a terminal
has a card slot on the front does not mean it is ready to take EMV cards.
A way to PREVENT
CARD-PRESENT
FRAUD via the additional
security provided by a
microchip embedded on the
card
A SET OF
STANDARDS
for interactions between
chip cards and point-of-sale
(POS) devices
Europay International,
MasterCard, and
Visa
CHIP
CARDS
SMART
CARDSEMV
WORLD
USAGE
Europe
Canada
Australia
Latin America
Asia
■ Now actively working to support EMV
■ One of the last major countries to
make the transition
THE
U.S.
WHAT IS EMV?

2. Chip cards are virtually impossible to clone by counterfeiters
and other criminals. The chip on the card generates a unique
cryptogram for every single transaction in order to verify that it is
being made with a valid card. The chip also stores personalized
security credentials that cannot be accessed without authorization.
EMV fraud prevention is only effective, however, in a card-present
environment. In card-not-present transactions (online or via
phone), the chip on the card is not read and the transaction does
not have that extra layer of protection.EMV fraud protection
is only effective
in a card-present
environment. Card-not-
present transactions
(online or via phone)
do not have this added
layer of protection.
KEY FACTS ABOUT EMV
How EMV Prevents Fraud
EMV cards can also be used for contactless payments at a
terminal equipped with near-field communication (NFC) technology.
The chip card – or a smartphone with a mobile-payment app like
Apple Pay – is passed close to or tapped on a contactless terminal
and the relevant information is immediately transferred. Many
experts predict that, with the prevalence of upgraded processing
equipment, the transition to EMV will also increase mobile and
contactless payments. This will most likely be seen at merchants
who value fast transactions, such as quick-service restaurants,
transportation companies, and transit agencies.
It is important to note, however, that EMV and contactless
payments are two different things: EMV is a fraud prevention/
security process using chip cards while contactless payments are
simply another method of exchanging data with a terminal. This
means an EMV transaction can also be contactless, but not all
contactless transactions are EMV. Many terminals that support
EMV also support contactless payments, so a merchant can get
both benefits when they upgrade their POS equipment.
EMV and contactless
payments are not
the same thing. EMV
helps prevent fraud
via a chip in the card
whereas contactless
payments are a method
of exchanging data
between a card or a
smartphone with a
mobile payment app
and a terminal.
EMV and Contactless Payments

3. Rising counterfeit card fraud is a key reason why U.S. card issuers, payment processors, and merchants are
making the switch to EMV. From 2007 to 2014, credit card fraud rates doubled to 10 basis points, which translates
to 10 cents out of every $100 transacted.
Adds an Additional Layer of Security to Prevent Fraud
The embedded microchip is virtually impossible to duplicate (or counterfeit) so criminals find
EMV cards less attractive to steal and clone.
Reduces Fraud Costs to Card Issuers, Payment Processors,
and Merchants
EMV helps protect merchants from the liability associated with card-present fraud. On
October 1, 2015, the liability for fraud costs shifts to merchants who do not have EMV-capable
equipment. This means that if a chip card is used at a traditional magnetic stripe-only terminal
to make a counterfeit purchase the merchant will be responsible for the chargeback because
the merchant does not have an EMV-capable terminal.
Helps Merchants Accept New Payment Technologies
with EMV-Capable Equipment
EMV terminals usually include readers for contactless payments, such as mobile payments
made via apps (e.g., Apple Pay). This can help merchants keep pace with consumers’ shifting
payment preferences and demands for new payment technologies.
Creates a Common Cardholder Experience
With more and more U.S. citizens using chip cards and merchants accepting chip cards, U.S.
and international travelers will now have a common cardholder experience. International visitors
will appreciate the additional security when making purchases in the U.S., and U.S. travelers
will find it easier to make purchases in Europe, Canada, Latin America, and Asia.
RISING COUNTERFEIT CARD FRAUD
2007-2014
credit card FRAUD rates
DOUBLED to 10 basis points
10 cents
out of every
$100 transacted
Source: Aite Group, EMV: Lessons Learned and the U.S. Outlook; June 2014
Benefits of EMV
KEY FACTS ABOUT EMV

4. AT A GLANCE: U.S. EMV TRANSITION TIMELINE
APRIL 2013
Merchant acquirers/
card processors
upgrade systems
OCTOBER 2016
Liability shift for
fraud at ATMs, and for
lost or stolen cards
OCTOBER 2017
Liability shift for
fraud using magnetic
stripe cards at fuel
pump terminals
OCTOBER 2015
Liability shift for
POS/card-present
fraud using magnetic
stripe cards
For most merchants, starting in October 2015 card-present fraud liability shifts to
the party with the least secure technology. So, if a merchant does not have an EMV-
enabled terminal or POS equipment, it will most likely be held responsible for some
or all of the costs associated with any fraudulent in-person purchase.
MERCHANT
PAYS THE COST
for fraudulent POS/
in-person purchases
card-present
FRAUD
LIABILITY
SHIFTS to least
secure party
NO
EMVacceptance
KEY FACTS ABOUT EMV
What this Means for Merchants
Need More Information?
If you’d like to learn more about EMV and
the impact it will have on your business,
contact us at sales@clearent.com or
866.205.4721.
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© 2015 Clearent, LLC, a Member Service Provider for Central Bank of St. Louis.clearent.com
WANT MORE INFORMATION ABOUT EMV?
Contact us at sales@clearent.com or visit clearent.com/emv to download these additional
resources on EMV.
FIVE MYTHS ABOUT EMV
HOW TO PROCESS EMV TRANSACTIONS
EMV ADOPTION GUIDE FOR MERCHANTS