Datacap’s Guide to EMV in the US

A Datacap Whitepaper

What is EMV?

Datacap’s experience with EMV – benefit of a “one-to-many” interface

What will EMV with Datacap look like?

PIN Pad hardware options

Updates for existing hardware/software?

When will it be available?

How should you prepare?

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What is EMV? On October 1st, 2015, liability associated with the fraudulent use of counterfeit or stolen cards essentially shifts from the card issuer to the merchant. Merchants can alleviate this risk by implementing payment solutions that comply with EMV (Europay®, Mastercard® and Visa®) that are currently employed across Europe and Canada. EMV-enabled (chip) cards contain a microprocessor in addition to the standard magnetic stripe. This microprocessor makes the duplication of a stolen card nearly impossible, leading to the eventual reduction of card-present (in-store) fraudulent transactions.

While EMV does mitigate fraudsters’ ability to clone cards

from stolen card numbers, it does nothing for ‘card not

present’ transactions (ecommerce), where the bulk of stolen

cards are used, or for lost/stolen cards unless a PIN is required.

US EMV will also not have an effect on merchant liability

concerning site-wide data breaches – only the on-site use of

fraudulent cards and disputed transactions (charge backs).

EMV alone cannot prevent the unauthorized collection of card

data. Merchants considering an upgrade to EMV should also

consider enhancing their on-site card security solutions via

encryption and tokenization where available.

It is important to note that EMV is a liability shift and not a mandate. Many merchants will likely wait until their Point of Sale system requires an update to migrate to EMV, while others may not upgrade at all, depending on their exposure to fraudulent transactions and willingness to adopt new hardware and EMV processes (slower transactions).

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Datacap’s experience with EMV – benefit of a one-to-many interfaceAs one of the few integrated payments providers to

successfully implement Canadian EMV, Datacap is ideally

positioned to help ISVs and dealers facilitate the migration for

their customers in the US. Again, it’s important to reiterate that

EMV is not a mandate. In fact, five years after the liability shift

in Canada, it is estimated that only 51% of Canadian merchants

have adopted EMV.

EMV adds significant complexity to processor certifications,

requiring individual development and certifications for

each PIN Pad to each card brand (Visa, Mastercard, Amex

and Discover) for every payment processing platform. POS

providers that have existing direct interfaces to US payment

processors will likely turn to a third-party solution to mitigate

costs associated with EMV development and certification.

The benefit of a “one-to-many” integration to an integrated

payments middleware provider like Datacap is that we handle

the initial and on-going development associated with payment

processing on behalf of the POS provider, allowing them to

save hundreds of thousands of dollars in development and

certification costs. Through one simple integration, POS

providers gain instant access to virtually all North American

Payment Processors and an evolving list of EMV-enabled hardware.

“As one of the few integrated payments providers to successfully implement Canadian EMV, Datacap is ideally positioned to help ISVs and dealers facilitate the migration for their customers in the US.”

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What will integrated EMV with Datacap look like?In order to read the chip on an EMV-enabled card, the card

must be inserted into a dedicated EMV card slot, available

primarily on PIN Pads and mobile EMV readers. Datacap

will drive EMV-enabled hardware directly via our controls,

completely removing all cardholder data from the POS app

(Out-of-Scope integration). POS integration partners currently

utilizing one of Datacap’s popular out-of-scope interfaces will

have a simple path (with only slight integration changes) to

support US EMV.

Because EMV implementation in the US will initially consist

of “Chip and Signature” (as opposed to Chip and PIN), EMV-

enabled configurations at table-service restaurants will be

very similar to pre-EMV set-ups. Servers will simply insert the

cards into an EMV reader instead of swiping them. However,

because the EMV-enabled card must be inserted into the EMV

reader for the duration of the transaction, it is likely that the

consumer will have to add the tip before the transaction is

initially processed. This may have a significant impact on the

merchant’s decision to initially implement EMV.

FOR PC-BASED POS

o PC-Based POS providers utilize dsiEMVUS™

(Datacap’s out-of-scope US EMV interface)

to add support for US EMV to their POS

application. The dsiEMVUS control drives EMV-

enabled hardware directly, creating a simple,

plug and play approach to EMV.

o NETePay also accepts transactions from mobile

devices to enable easy POS extensions (Support

for mobile EMV coming soon – devices TBD).

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o Current POS partners have modest integration

work to support EMV. POS partners utilizing

dsiPDCX™ for out-of-scope NETePay integration

or DSIEMVClientX™ for Canadian EMV have the

simplest path to EMV in the US, with only a few

slight integration changes required to support

US EMV transactions

FOR MOBILE POS

o Tablet and Cloud-based POS providers

utilize Datacap’s IPTran LT™ Mobile or

PaymentsDrawer™ for integrated payments

and peripheral management. Datacap’s mobile-

centric products drive POS peripherals (receipt

printers, pole displays, PIN pads, MSRs, barcode

scanners, weigh scales, etc.) on behalf of the

POS while adding integrated payments support

for virtually all North American processors.

o EMV-enabled PIN Pads connect directly to

a dedicated “PIN Pad” port on the IPTran LT

Mobile or PaymentsDrawer for an easy plug and

play implementation (Support for mobile EMV

coming soon – devices TBD).

FOR ECRs

o ECRs and embedded POS utilize Datacap’s

Tran™ family of hardware to drive a variety of

EMV-enabled PIN Pads.

o For single-lane installations, the new, small

footprint IPTran™ LT drives the EMV-enabled PIN

Pad directly on behalf of the POS.

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“This enables a flexible EMV solution that won’t lock merchants into a single pad or manufacturer option”

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o For larger installations, Datacap’s new, small

footprint PDCs™ (Peripheral Device Controllers)

drive the PIN Pad at each lane and forward

transactions to a Tran™ Server or NETePay™

software which act as a “payments hub”.

The Tran Server and NETePay also accept

transactions from mobile devices, creating an

additional opportunity to offer existing and

prospective customers a mobile POS extension

without changes at the POS (Support for mobile

EMV coming soon – devices TBD).

PIN pad hardware optionsAs with Datacap’s existing out-of-scope payment solutions,

hardware compatibility is constantly evolving. dsiPDCX

(Datacap’s existing out-of-scope control for PC-based POS)

now supports dozens of plug and play PIN Pads, contactless

readers, all-in-one touch terminals, and MSRs. Datacap handles

all hardware integration and certifications on behalf of the

POS, allowing for a fast and flexible integration.

For US EMV, Datacap plans to initially certify and release the

VeriFone VX805, a cost effective entry-level PIN pad from

VeriFone supporting EMV, standard magnetic stripe and

contactless payments (Apple Pay, Google Wallet, Softcard,

etc.). Shortly after, we plan to release support for higher-

end customer-facing PIN pads from Ingenico and mobile

EMV readers, consistently adding new device support from

a variety of providers going forward. This enables a flexible

EMV solution that won’t lock merchants into a single pad or

manufacturer option.

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When will it be available?Once hardware and platform development is completed,

individual processor and card brand certifications are

necessary to move forward with support for US EMV. We

expect to complete our first round of certifications and have

select processor availability in late Q2 2015. Support for US

EMV on most processors is targeted for completion and

availability for installation prior to the October 2015 liability

shift. Check our website, join our mailing list and/or follow us

on social media for EMV releases and other payments-related

updates.

Request an Integration Guide to get started today!

Upgrades for existing hardware/software?DATACAP SOFTWARE

o US EMV will be supported by go-forward

versions of NETePay. Standard upgrade fees

will apply for purchased software. Software

obtained via one of Datacap’s usage/rental

programs will include no-cost EMV updates.

DATACAP HARDWARE

o US EMV will be supported on the IPTran™ LT,

IPTran™ LT Mobile / PaymentsDrawer™ and the

Tran™ Server.

o Merchants utilizing legacy Tran products who

intend to support US EMV will need to upgrade

to current hardware/applications. Upgrade

pricing can be obtained by logging into

PSCS™ and choosing the “Upgrade or Switch

Processors” button on the main menu.

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o For IPTran LT, TwinTran Server or IPTran

LT Mobile customers who have purchased

hardware in 2015, a hardware swap is available

for merchants interested in moving to EMV –

only the application upgrade fee will apply.

How should you prepare?Educate your merchants

“Creative marketing” by hardware OEMs pertaining to US

EMV migration is leading to rampant confusion among

merchants. Talking to your customers about the real benefits

and short-comings of EMV will prove to be invaluable in

regard to their comfort-level when it comes time to make

an upgrade decision. Because EMV is simply a liability shift

and not a mandate, merchants should first determine if the

cost to upgrade to EMV is justified. Merchants who regularly

experience charge backs or fraudulent card use will likely

upgrade to EMV before the deadline, while those that don’t

have in-store fraud or disputed transaction issues may be

better served to wait until their next POS upgrade to move to

EMV – if at all.

Confirm your POS Providers’ EMV Plans

While EMV migration using Datacap products consists of a

simple one-day change to most existing POS integrations,

it’s important to contact your POS provider and confirm that

they’re moving forward with EMV support via the Datacap

update – especially before talking with merchants about the

functionality.

Install “EMV-ready” equipment

Datacap will support EMV on the following products. These

will be upgradeable to EMV, once certifications are complete

and software/app updates are released.

o IPTran™ LT – payments for single-lane embedded POS

o TwinTran™ Server – multi-lane ‘payments hub’

o IPTran™ LT Mobile – Payments Drawer™, payments and peripheral drivers for mobile POS

o NETePay™ - payments for PC-Based POS

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100 New Britain Blvd Chalfont, PA 18914

Main (215) 997-8989Fax (215) 997-3919 www.datacapsystems.com

Contact Datacap for preliminary specs and be sure to join our mailing list and follow us on social media to receive EMV-related updates!