Chip cards are regular plastic credit, debit and pre-paid cards with an embedded microchip. The chip protects in-store payments because it generates a unique, one-time code that is needed for each transaction to be approved. It is virtually impossible for fraudsters to replicate this feature in counterfeit cards providing greater security and peace of mind when used in store. A chip card also has a magnetic stripe on the back of the card and may include Visa payWave technology for contactless payments.
This is an important step forward for all stakeholders in the payment system, as we are building a future-proof infrastructure that will help to reduce fraud, support emerging payment technologies, and enhance international acceptance.
By the end of 2015, U.S. financial institutions are projected to issue nearly 600 million chip enabled payment cards.
No. Visa continues to support a range of cardholder verification methods (CVMs) including signature, online PIN, and no-signature for low-value, low-risk transactions. Visa will maintain interoperability across those methods with technical standards, business rules, and compliance programs.
Yes. Chip cards include a magnetic-stripe to ensure that Visa-branded cards may be used everywhere they are accepted, including in environments where migration to chip technology is not complete.
There are no specific plans to eliminate magnetic-stripe. Global chip migration will continue to be gradual, and until we reach ubiquity, the magnetic-stripe on the back of the card will continue to provide global acceptance interoperability.
The merchant will process a "fallback" transaction using the card's magnetic-stripe. If that doesn't work, the merchant should ask the customer for another form of payment. Keep in mind that key-entered transactions should only be used as a last resort, if at all.
The merchant will follow a similar procedure as today - secure the card in a safe location and ensure it is returned to the right person with ID verification if the consumer should return to the store.
Dual-interface refers to the ability of the terminal to accept both contact and contactless EMV chip cards or payment devices such as mobile phones. Dual-interface terminals are able to process transactions from various payment products including EMV chip contact cards, contactless cards, mobile devices, and magnetic-stripe cards.
In general, a contact or contactless chip transaction should have a negligible difference in speed compared to a magnetic stripe transaction that you process today.
For contact chip cards, your customers must insert the chip card into the payment terminal reader instead of swiping the card as they do with a magnetic stripe card. Also, your customers must leave the chip card in the payment terminal reader until the terminal prompts them to remove the card. It is recommended that the customer-facing display prompt the cardholder when it is time to insert and remove the card, so as to train the cardholder both in leaving the card in the reader, and in inserting/removing it at the proper time.
For contactless cards and mobile devices, your customers will simply hold the contactless chip card or mobile device up to the payment terminal for a few seconds, until the 4 lights flash and a beep is heard signifying the contactless chip card or mobile device has been successfully read.
TIP offers merchants who update their POS infrastructure a waiver from the requirement to complete an annual Payment Card Industry (PCI) Data Security Standard (DSS) validation assessment. The elimination of this requirement could represent a significant cost reduction for participating merchants. This program benefits qualifying U.S. merchants who process at least 75 percent of their transactions using fully enabled dual-interface (contact/contactless) terminals. While they still need to be compliant with the PCI DSS, qualifying merchants will not have to go through the process of validating compliance.
Visa suggests you contact you acquirer as soon as possible to ensure you are adequately prepared to accept chip payment transactions.