The PEI Journal last wrote at length on EMV (Europay MasterCard Visa) in our Third Quarter 2012
issue. Almost two years ago.
What has happened since then? Quite a bit, actually. And
yet the future for this new credit
card security technology is still
surprisingly unsettled. Is EMV likely
to one day account for most retail
That remains to be seen.
By now, most PEI members
have at least a passing familiarity with EMV. In brief, EMV
technology includes three separate components. First,
instead of (or in many cases, in addition to) the familiar
magnetic strip on the back of the credit card, a small,
embedded microprocessor contains key identifying data.
Second, the chip-equipped card must be used in an EMV-enabled payment device. Third, to take full advantage of the
technology, card issuers and processors must implement new
processes and systems.
When all of the technological changes are in place,
transaction security is improved in three measurable ways:
• Card Authentication. Upon each use, the card is
authenticated through a dynamic encrypted process that
confirms the card’s validity.
• Cardholder Verification. Identifying credentials encoded
into the card also allow the accepting device to confirm
that the person executing the transaction is the person
authorized to use the card.
• Transaction Authorization. Unlike magnetic-strip cards,
each EMV transaction receives a unique, encrypted code.
As a result, data from one transaction cannot be copied and
There’s no question that the movement toward EMV has
made some progress in the last couple of years. Back in the
summer of 2012, Visa had issued only about 1 million EMV-enabled credit cards in the United States. As of September
2013, that number had grown to 6. 6 million. Other credit
card issuers report similar increases, with most estimates putting the total number of EMV-enabled cards in the United
States at somewhere between 12
and 16 million. Not an insignificant
number, but still a tiny fraction of
the approximately 1. 3 billion U.S.
credit and bank cards in use.
In our industry, the EMV time-
line set out a few years ago continues
to move along. Two remaining
critical dates provide a strong incentive for fuel marketers to
convert their payment technology:
• October 1, 2015: Merchants that decline to use
EMV-compatible POS (point-of-sale) technology for in-store transactions by this date will be liable for any in-store
• October 1, 2017: Fuel marketers that have not replaced
or retrofitted their dispensers with EMV-ready equipment
will assume liability for fraudulent transactions in the
Unlike the PCI payment system upgrade of a few years
back, conversion to EMV is a choice, not a mandate. Your
customers will get to decide whether they want to “go there.”
In most cases, the choice will not be easy. In the summer of
2012, we framed the issue this way:
For petroleum marketers, the move to EMV is, in
Unlike the PCI payment system
some sense, the classic chicken-and-egg scenario. Why
would a retailer invest in costly hardware/software
when EMV card usage is clearly not yet there? Going
forward, is an investment in new or upgraded equip-
ment really likely to pay off, especially on pay-at-the-
pump transactions? Or would opting for a possible
by Rick Long
upgrade of a few years back,
conversion to EMV is a choice,
not a mandate. Your customers
will get to decide whether they
want to “go there.”