EVM Chip Cards and the ‘Liability Shift’
Will you be ready?
While Jan. 1 marked the start of a new year, eight months from now we will be ushering in a new era for payments. October marks what the payments industry knows as the “liability shift” – the deadline for merchants to accept so-called EMV chip cards.
Should parties, such as parking operators, fail to accept EMV chip cards by October 2015, they will be held financially responsible for the cost of any fraudulent transactions and risk a loss of reputation. Additionally, they may face fines issued by the card brands.
What does it all mean? Will parking operations have to change all their equipment? What are their options? A PT panel of experts at PIE 2015 will take on those questions and more, and perhaps give you one less thing to worry about.
(The Parking Industry Exhibition, sponsored by Parking Today, will be March 29-April 1 at the Hyatt Regency O’Hare in Rosemont, IL.)
The U.S. is the last major economy to migrate to EMV, in some cases nearly 10 years behind other countries. While most of the world has already successfully embraced the EMV Standard to mitigate risks associated with magnetic stripe technology, the U.S. has continued to lag behind, thus making it a relatively easy target for hackers.
Whether pay-and-display, single-pace meters, pay-on-foot, mobile phone payment or online, payment systems are the lifeblood of the parking industry. According to the International Parking Institute, the U.S. parking sector generates upwards of $25 billion to $30 billion in gross parking revenue each year.
This number has the potential to be compromised should parking operators experience any breaches after October 2015, as they will then be financially liable.
Helping to feed this demand, consumer confidence has continued to be tested following a string of large retailers being affected, very publicly, by data breaches – from the likes of Home Depot, Michaels, Staples, Neiman Marcus and, most famously, Target.
Consumers alike are becoming more aware of the proven benefits of EMV and have started demanding chip cards to ensure their security. A recent MasterCard survey revealed that 57% of Americans expect to receive a chip card in the mail within the next six months.
This surge in consumer demand is a clear indicator that the cost and repercussions of not embracing EMV technology can easily outweigh the upfront costs of compliance.
Meanwhile, the migration to the EMV Standard is a massive undertaking across a range of sectors. The scale of the project, including the upgrading/replacement of payment terminals, as well as banks having to re-issue EMV-enabled credit and debit cards, is a leading factor as to why the U.S. has taken so long to adopt the fraud-fighting technology.
As the country transitions from magnetic stripe cards to chip-enabled cards, the parking industry must ensure that its technology has been upgraded to the EMV standard. In order to do so, parking operators will look to their manufacturers for an EMV upgrade.
Manufacturers, in turn, are faced with a dilemma: Should they develop an in-house solution or purchase one off-the-shelf? From start to finish, bringing a payment system up to the EMV standard can take about 22 months.
To be fully prepared for the October 2015 liability shift, parking operators should have begun their migration to EMV back in January 2014.
One large obstacle faced by many in an attempt to deliver an in-house EMV solution is the knowledge gap. Creating EMV solutions requires in-depth knowledge surrounding EMV specifications, which continuously evolve.
Manufacturers may opt out of investing in growing this knowledge internally and, instead, join forces with an experienced EMV-ready partner. Offering pre-certified solutions will greatly reduce the amount of time and effort to get one’s EMV-enabled system up and ready.
Without a pre-certified solution, five steps must be considered:
1. Select an appropriate chip card reader or card reader and develop a robust and reliable driver for it. This can take on average of three months per chip card reader.
2. Update all existing processor interfaces to support the new EMV requirements. This can take up to 6 months.
3. Get all the major “Card Scheme Certifications,” such as MasterCard M-TIP, Visa ADVT, American Express AEIPS or Discover DPAS. These take about four months, and have to be repeated for every chip card reader and processor combination.
4. Create a terminal management system (TMS) to keep chip card readers compliant and up-to-date by running the latest version of the EMV Standard. A TMS enables this remotely, if an estate of chip card readers cannot be updated manually.
5. Include support for Point to Point Encryption (P2PE), because in combination with EMV, your solution will be future-proofed and provide the safest payment system available.
All parking operators migrating to EMV (as well as those across
other industries such as retail) are questioning how that will impact customer experience.
Chip cards are inserted for the duration of the transaction, rather than being swiped or dipped like magnetic-stripe cards. While transaction times may be slower with chip-enabled cards, transactions will be undoubtedly more secure, resulting in an overall more positive user experience.
The time is now for parking equipment manufacturers to take action on EMV adoption to ensure the safest payment systems possible. Working with a partner and combining EMV with other levels of security will ensure the best experience available for the consumer today.
These will be some of the areas of discussion during the PT Experts Panel presentation at PIE 2015.
Contact Dave Witts, President of U.S. Payment Services for
CreditCall Corp, at email@example.com.
For more information on PIE 2015, the Parking Industry Exhibition, set for March 29-April 1 at the Hyatt Regency O’Hare in Rosemont, IL (Chicago) and sponsored by Parking Today, go to