How Does the New EMV Law Impact Hotels? [New Legislation- Oct. 1st]

Banks across the United States are adding EMV technology (Europay, MasterCard, and Visa). Credit cards will be equipped with a computer chip that’s extremely hard to counterfeit. This new security protocol helps prevent credit card fraud which will begin effect on October 1st, 2015. But what does this mean for hoteliers?

Here’s a simple breakdown of the difference between Mag Strip credit cards and the EMV credit cards:


What is EMV?

EMV stands for Europay, Mastercard, and Visa.

A new security protocol has been added to the traditional magnetic cards to prevent credit fraud.

EMV is also referred to as:

  • Smart-chip card
  • EMV smart card
  • Chip-and-choice/PIN/Sig


What is different?

Magnetic strip cards

  • Contain static details about the card: name, number, and expiry.
  • Easily copied.

EMV smart cards

  • Require a specific card reader to read the chip.
  • The chip contains an authorization code, which will be updated to a new value by the card reader during the transaction, making it harder to hack.


Why the change?

Almost half of the world’s credit card fraud occurs in the United States despite only a quarter of credit card transactions being carried out there. Unsurprisingly American banks want to reduce the frequency of these occurrences by moving away from magnetic-stripe cards, which are much easier to counterfeit.

40% of the world’s cards and 70% of its terminals deployed outside the U.S. are already using the EMV standard. The United States is the last major market still using magnetic-stripe-only cards and is slowly introducing the new EMV reader.

Carolyn Balfany of MasterCard is confident this new technology will reduce instances of fraud "The new process makes it almost impossible for fraudsters to create fraudulent or counterfeit transactions." The introduction of this new technology will have a huge impact on the card agencies and banks as currently the liability for fraud lies with them. From next month, October 2015, when someone pays with a fraudulent chip card, and a business is not set up with an EMV card reader, the banks will no longer be liable. This liability shift means that those issuers and merchants using non-EMV compliant devices that choose to accept transactions made with EMV-compliant cards assume liability for any and all transactions that are found to be fraudulent. This leaves smaller privately owned business, including hoteliers, susceptible to greater risks as they can no longer rely on the banks and credit card companies to foot the bill left by the fraudsters!


Does it apply to Frontdesk Anywhere’s clients?

The connection to, Paypal, and USA ePay is a “Card Not Present” connection, also called MOTO for Mail Order/ Telephone Order.


MOTO connection is not subject to EMV

Simply put, the new law doesn’t require any change for hotels using Frontdesk Anywhere and our payment gateways partners.

Should you have any question, chat with us online or call our support line: 415 800 5940 Ext:3


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