The FINANCIAL — MasterCard on June 20 unveiled a new EMV chip terminal testing and certification program aimed at speeding chip adoption by U.S. merchants.
MasterCard operates a chip terminal testing and certification process used by merchant bank acquirers and value-added resellers (VARs) before terminals go live at checkout. The new program maintains terminal testing and certification quality while easing in-store terminal activation by empowering acquirers and VARs as follows:
Acquirers will have more responsibility and flexibility for terminal testing as a part of their own internal processes and schedules. Acquirers can now follow recommendations and use MasterCard terminal testing procedures or they can choose alternative testing processes and tools that support the integrity of their existing procedures. MasterCard has also cut the number of needed tests by 58 percent, minimizing mandatory tests and allowing acquirers to use their discretion and expertise in deciding when terminals are ready for deployment.
VARs will receive more and dedicated resources to help accelerate terminal deployments. The new resources will help VARs navigate terminal configurations, test processes and ramp up in-field issue resolution. For example, if the cardholder experience is impacted by a terminal, documentation will exist to assist in resolving the issue in a timely manner.
Acquirers and VARs will benefit from published guidelines on standard terminal test configurations which will improve the testing cycle and simplify testing processes. Standard terminal configuration packages will be available for certain industry segments, such as quick-serve restaurants and big box retailers.
“The purpose of the EMV transition is to create more layers of security and to help drive card fraud out of the U.S. Elavon has been working with MasterCard and our merchant customers for over three years to develop strategies, implement hardware and software upgrades and train employees. By accelerating the testing and certification process, MasterCard and Elavon can make more terminals available to more merchants, increasing the safety of the entire payments ecosystem,” said Guy Harris, president of Elavon North America.
EMV Chargebacks
The purpose of the EMV transition is to drive counterfeit card fraud out of the U.S. market. MasterCard has successfully assisted EMV migrations in approximately 150 countries and sees the current U.S. EMV migration and chargeback levels to be consistent with other markets, following the implementation of a liability shift.
MasterCard is adding more intelligence on its network to minimize chargeback costs to merchants who have not yet transitioned to EMV. As of October 1, 2015, liability shifted between issuing banks and merchants, rewarding the party with the more secure technology by holding the other party responsible for counterfeit card fraud. Many merchants are seeing these costs – which previously were absorbed by issuers – for the first time.
The MasterCard network now has checks and blocks to ensure that chargebacks follow the liability shift guidelines. For example, the system prevents invalid chargebacks for fraud occurring at ATMs and automatic fuel dispensers where liability shifts do not go into effect until October 2016 and October 2017, respectively.
MasterCard has policies in place that limit merchant exposure to excessive chargebacks on fraudulent accounts. These limits are applicable globally, for all types of fraud, including in store and online. MasterCard continuously evaluates thresholds related to these policies to ensure a balanced payment ecosystem.
“The whole industry wins when action is taken against counterfeit card fraud. Reducing terminal certification-testing time to a couple of hours from as long as a couple of weeks is one positive step we can take in a more mature market. Innovations including M/Chip Fast speed chip transaction times and are having a positive impact as is easing fraud costs to merchants,” said Chiro Aikat, senior vice president for product delivery-EMV for MasterCard. “We are keenly focused on our goal: driving counterfeit card fraud out of the U.S.”
Chip Momentum Continues
MasterCard continues to see great progress in EMV adoption. The company recently announced that almost 70 percent of all U.S.-issued MasterCard branded consumer credit cards are now chip cards. This marks a 58 percent increase in chip cards in market since the October 1, 2015 liability shift. However, cards are just half the equation.
Chip-active merchant locations have also increased to 1.4 million, up 240 percent since October 1. This number includes 1 million chip-active local and regional merchants, a 170 percent increase since the liability shift.
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