ATM EMV Chip Reader Migration

You may have heard about the new EMV chip cards coming to the US and how it will affect your ATM. Should you upgrade your ATM card reader to support EMV chip cards? An EMV upgrade for an existing machine will cost you around $300 and an upgrade on a new machine will cost you around $100. The upgraded reader will still read the magnetic stripe for old cards, but will also support the new EMV chip cards. You may be wondering if it is worth it and when do I need to upgrade by?

There are two deadlines you need to know about. In October 2016 MasterCard switches liability to ATM operators and in October 2017 Visa shifts liability to ATM operators for fraudulent ATM transactions. What this means is if someone successfully withdraws money from an ATM you operate after those dates using a stolen card and your machine has not been upgraded to an EMV card reader you will be bear the full cost of the fraud. This may never happen, but if it does the cost could be substantial and potentially greater than the cost of the whole ATM. You will have to make this cost/benefit analysis on your own, but the upgrade costs seem relatively low compared to the potential risk to me. I am recommending to all my clients that they upgrade before the dates above. For greater detail on EMV chip cards – what they are and why they are more secure see below.

EMV stands for Europay, MasterCard and Visa. It is global standard for processing debit and credit card transactions on chip based cards. It replaces the magnetic stripe card system of storing and reading data. The main benefit EMV chip cards offer is it greatly reduces the amount of fraudulent transactions for card-present transactions. Unfortunately it has no effect on card not present transactions such as online purchases.

Currently, a major source of credit card fraud in the United States is due to card skimming, where a corrupt employee or malicious electronic device scans and stores the card data from a card’s magnetic strip. EMV chip cards make skimming card information much more difficult. A magnetic stripe card stores static data. Once a thief has scanned and copied this data they can create counterfeit clones of your card. However, an EMV chip card stores dynamic data. EMV cards have a tiny integrated circuit on the card which generates a unique transaction code every time a new purchase is made. If this data is skimmed it is useless to a criminal and could not be used to create a working cloned card.

This is the main benefit of EMV chip cards. They reduce card skimming. Since the United Kingdom began implementing the new technology in 2004 payment fraud in face-to-face transactions has fallen by 69 percent and fraud losses from lost and stolen cards have fallen by 61 percent.

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