Using next-gen payment processing to meet the demands of EMV

By : Andy Brown

November 21, 2016 08:00 AM

Over the past year or so, merchants and financial institutions (FIs) in the US have been getting used to the widespread rollout of EMV chip-enabled payment cards. This represents a significant challenge, with the payment authentication process having to move focus away from the magnetic stripe on credit and debit cards and onto the EMV chip.


One of the critical elements of the October 2015 EMV rollout in the US was the shift in fraud liability to card issuers and acquirers. This means that accountability for any fraudulent card-present magnetic transactions fall on the party that has failed to adopt EMV chip technology - either the issuing FI or the merchant.


Given the scale and significance of this change, it's worth considering how solutions such as transaction processing platforms can help your business stay compliant and keep up with changes in the payments landscape.


Next-generation payment processing
Dedicated payment processing platforms, such as Authentic from NCR, offer a range of advantages for FIs, including the ability to accept any type of transaction from any device or system. These payments can then be processed, authenticated and routed to the relevant destination.


One of the most valuable features of agile and flexible payment solutions is their ability to adjust to changes in the regulatory environment and reflect evolving business and consumer trends. When it comes to meeting the challenges of EMV adoption, Authentic can help your business be ready for current and future standards in the payment technology. Naturally it supports contactless and mobile payments but also can be used as a full payments hub handling transactions from non-card channels such as internet banking or the branch.


Another key benefit of the platform is its scalability. It can facilitate everything from small gateway systems to global networks and drive all major ATM and point-of-sale devices.


This sort of flexibility could prove crucial for FIs and merchants that want to be prepared for any future changes in EMV standards.


Growing EMV portfolio
The US is not alone in playing catch on the issuance side. Figures from EMVCO the end of 2015 show that only 33% of cards are EMV compliant and no market has 100% coverage. Often changing the cards to EMV impacts the complete processing functions of the issuer as some older processing technologies cannot be upgraded to support EMV transactions. Using modern payment processing platforms, such as Authentic, as a gateway can enable the transition, by ensuring transactions are translated to ‘mag-stripe’ for processing.  This enables the cards, whether credit, debit or prepaid or more specialized such as fleet or fuel cards, to be moved to EMV while retaining the current core authorization service.


What's on the horizon for EMV?
One year on from the EMV rollout in the US, there are more significant developments for banks to be aware of, including MasterCard’s liability shift for ATMs. This change, which has already taken effect, means that FIs processing ATM transactions using MasterCard products will be liable for any fraud occurring on chip-enabled cards at non-chip-enabled machines.


Visa is due to begin enforcing this rule in the US from October 2017, while fuel dispensers will be affected by the liability shift from the same date.


Stephanie Ericksen, vice-president of risk and authentication products at Visa, told Digital Transactions News that many ATM operators accepting both MasterCard and Visa cards are upgrading cash machines for both brands. "We have seen a lot of banks and financial institutions upgrade their ATMs," she said.


Ms. Ericksen also pointed out that a large proportion of bank-owned ATMs are already equipped for EMV chip card acceptance, while independent organizations may take a little longer to complete the transition.


All things considered, the shift to EMV and the process of FIs and merchants getting to grips with the changes in fraud liability is likely to be a long and complex journey. Equipping your business with the best available technology and solutions will maximize your chances of meeting the challenges of EMV and guaranteeing a high standard of security for your customers.

Andy Brown

Marketing Director, Payments

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Andy has nearly 30 years experience in e-payment systems from the delivery and support of systems in the Far East and Europe and in the product management and marketing perspective. Based in the UK, Andy is responsible for marketing NCR payment solutions.