Services

Chip Technology

VISA AND MASTERCARD HAVE MOVED TO CHIP ENABLED CARDS AS OF MARCH 31st, 2011

As you know, credit card fraud continues to be a significant issue for businesses and consumers. The move to CHIP & PIN technology was introduced to help prevent fraud and secure Canadian electronic payments.

What is a CHIP Card?

CHIP and PIN payment cards are credit and debit cards embedded with a microchip that can store and process data securely. CHIP cards and CHIP terminals work together to ensure a highly secured transaction. The microchip is virtually impossible to copy and makes it difficult for fraud organizations to target cardholders and businesses alike.

As a result, CHIP cards are being issued by Canadian financial institutions and as such, you will notice that more and more of your customers will present their CHIP cards at your location(s).

The positive Impact of CHIP technology on your business.
Enhanced Security:

CHIP technology is virtually impossible to duplicate, increasing consumers’ confidence in the payment system, while decreasing your fraud management costs.

The positive Impact of CHIP technology on your business.
Innovation:

CHIP technology will provide a platform for new product and service offerings, allowing you to keep pace with your competitors’ card payment technologies.

The migration to CHIP cards in Canada
Working together to develop Canadian Standards for CHIP, Payment Brands (VISA ®, MasterCard ®, Interac ® & American Express ®) have established migration plans to introduce CHIP cards to the market and we want to be sure you are aware of these plans and how they will affect you .

The liability for fraudulent transactions shifted on March 31st, 2011 to merchants that have not implemented CHIP & PIN devices.

In other words, the liability for certain fraudulent transactions, such as counterfeit, lost & stolen or card-not-received fraud, has shifted to merchants that have not implemented CHIP & PIN devices.

When will the Liability Shift impact your Business?
Visa Canada and MasterCard Canada had originally set the deadline for Liability Shift as early as October 2010, however, in response to concerns raised by MONEXgroup and other processors, both issuers announced on September 24th , 2010 an extension of the deadline to March 31st, 2011. As a result all merchants who have not yet shifted to Chip based terminals will now be held liable for fraudulent transactions.

Interac has not set a liability shift date, but has mandated that all Interac debit acceptance devices be CHIP compliant and enabled by December 31, 2015. American Express Canada has not yet set a liability shift date.

Click here to view VISA Canada’s Press Release
Click here to view MasterCard Canada’s Press Release

What do you need to do?
Canadian retailers have made significant investments over the past year, switching to CHIP-and-PIN technology to continue ensuring the security of credit and debit card transactions in their stores. Ensure your Point of Sale terminal is able to accept CHIP and PIN cards – if you suspect/know that you have a non-CHIP compliant terminal, be sure to upgrade your terminal to accept CHIP and PIN cards prior to the Liability Shift dates.

How is MONEX facilitating the switch to CHIP?
MONEX has been at the forefront of evolving technology for years. Monex is the first privately-owned Canadian payment processor to have CHIP-enabled software available, and the upgrade to this software is FREE of charge to all MONEXgroup merchants with CHIP enabled hardware.

Call us at 1.866.286.7787 to upgrade your terminal. If you have additional questions, try our live chat between the hours of 9am-5pm (EST)

What is chip card?

A plastic payment card (debit/credit) that has microchip technology, that stores information in a secure encrypted format.

How will it work?

Instead of the current signature process, cardholders enter a PIN (personal identification number) to authorize the transaction.

What is actually on the chip?

The microchip stores cardholder information, such as the cardholder’s account number.

What is EMV?

The established international standard for chip cards and terminals was developed by Europay, Master Card and Visa (EMV) to ensure worldwide interoperability. EMV defines how debit and credit payment applications work. In February 2009, American Express (Amex) became the fourth owner/member of EMV Co.

What are the benefits of the Chip Card to consumers?

Chip cards and chip terminals work together to ensure a highly secure transaction by validating the card and the cardholder via a PIN. The computer chip makes cards more difficult to copy, reducing counterfeit fraud. Chip credit and debit cards make a secure payment system even more secure.

Why is the industry Moving to Chip?

The move to chip technology is the latest innovation in the rapidly changing payments environment. The move demonstrates the industry’s efforts to prevent counterfeit and lost and stolen fraud and to further secure Canadian electronic payments.

What about cards with a magnetic stripe?

Chip terminals will recognize both chip and magnetic stripe cards. In non-chip enabled terminals, cards will be swiped and a signature will continue to be required for credit card transactions and a Pin for debit transactions. Magnetic stripe will co-exist with chip card technology to allow consumers to user their cards at non-chip enabled terminals.

Related links if you require more information :
VISA CHIP
MASTERCARD CHIP
INTERAC CHIP

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Protecting Merchant and Customer Data with CHIP Credit Cards

With credit cards increasing in prominence and credit card fraud and credit information theft following suit, merchants and credit card providers are ramping up efforts to get CHIP and PIN technology integrated at credit card terminals across Canada and the United States. Implementing the capacity to utilize CHIP credit and debit cards will allow small and medium sized businesses that can’t afford more high tech data security measures to protect themselves and their customers.

Credit card processing with CHIP enabled point of sale machines is significantly more secure from fraud and theft. CHIP credit cards are embedded with a microchip that contains necessary payment data in a secured format that is much more difficult to copy than with a standard credit card. This is an important step towards developing a more robust credit network.

In keeping with industry and government efforts to protect consumers from fraud, Visa and Mastercard have announced that they are changing their liability regulations so that merchants will bear all the liability for fraudulent transactions if they have not implemented CHIP and PIN devices at their credit card terminals. The deadline was recently extended to March 31, 2011 for Visa Canada and Mastercard Canada. This process of migration to CHIP and PIN will continue with other credit card providers, so it is in the best interest of all merchants to make the switch as soon as possible.

Fortunately, because most credit card service processors have been in communication with the major credit card companies to protect the interests of merchants, businesses should expect to be able to work in coordination with their providers to ensure 100% compliance by the shift date. This does mean that for merchants in Canada who haven’t heard anything from their providers about the need to integrate CHIP credit card and PIN debit card verification technology into their credit card terminals, it is time to start that conversation with providers or even consider switching to a service provider that is more proactive in protecting its customers.