EMV Chip Technology
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EMV Chip Technology

EMV is the recognized standard for debit and credit payment cards using chip card technology developed by Europay, MasterCard, and VISA. EMV is an initiative to reduce counterfeit cards through the use of smart chip embedded on the face of the card.

Bank of Guam's cards are transitioning to chip, a new generation of payment card technology that will make a safe payment system even more secure.

EMV for Merchants

What is EMV?

EMV is the recognized standard for debit and credit payment cards using chip card technology developed by Europay, MasterCard, and VISA. EMV is an initiative to reduce counterfeit cards through the use of smart chip embedded on the face of the card.


EMV Protection at Your Point of Sale

With the total cost of fraud in the U.S. estimated at $8.6 billion per year, preventing fraud growth has become a priority. In response, all the card processing networks have committed to migrating to EMV chip technology, which means that before long, it's likely your customers will be presenting a new type of payment card – one with an embedded smart chip. EMV-enabled cards (chip cards or smart cards) have an embedded microprocessor chip that stores cardholder data and creates a unique digital signature for each transaction.

In the next few months, Bank of Guam will be converting to EMV. To make the transition to EMV as smooth as possible, Bank of Guam offers this simple guide for merchants to prepare for this change.


Important Things to Know

EMV is the global standard for embedded-chip technology used to authenticate credit and debit card transactions with improved data security. Launched by EuroPay, MasterCard® and Visa® and adopted by all major credit card brands, chip technology is currently in use or is being implemented in more than 80 countries.


Fraud Liability Shift

The new cards will offer enhanced security with every electronic transaction. Here's how:

  • The major credit card brands all set multi-year deadlines in 2011 for credit card processors and the retailers they serve to transition to EMV.
  • As of Oct 2015, merchants are liable for any counterfeit and stolen card fraud that may occur unless their terminals are EMV-compliant. This is commonly referred to as the "fraud liability shift."
Frequently Asked Questions

Are merchants required to convert their terminals to be EMV-compliant?

Merchants are not required to upgrade their terminals to be chip-enabled. However, merchants should be aware that on Oct 1, 2015, a counterfeit fraud liability shift took effect. After this date, any counterfeit fraud that occurs on card present transactions will be absorbed by the party that is least EMV-compliant. So if a Chip Card is presented on a non-EMV terminal, and the card is later found to be counterfeit, the merchant will be liable for any losses incurred.

Will all merchants be converted at the same time?

No. Merchants will be converted in different phases. The Bank of Guam will be contacting each merchant on their scheduled deployment.

Will there be a change in the processing of Chip Cards?

Yes. With Chip Cards, customers and merchants will no longer swipe the card. Instead, the Chip Card must be inserted into the terminal card reader and kept there for the duration of the transaction until prompted to be removed. Because this is a significant change from the current process, Bank of Guam will ensure that merchants and their employees are properly trained on the new procedures.

If the terminal is not EMV-compliant, can the merchant accept Chip Cards?

Yes. Because most Chip Cards still also have a magnetic strip on the back, they can be used at a terminal that is not yet chip-enabled by swiping the card in the traditional manner.

If the terminal is already upgraded and chip-enabled, can the merchant still accept cards that are not chip-enabled (i.e. cards with only a magnetic strip)?

Yes. Merchants with terminals that are already chip-enabled can continue to accept non-chip cards or cards with only a magnetic strip. These cards have to be swiped in the traditional manner.

Does EMV technology provide the same counterfeit card protection to merchants for card-not-present transactions such as online purchases or MOTO (Mail Order/Telephone Order) purchases?

No. The enhanced security features of Chip Cards are only applicable with card-present transactions, where a Chip Card is in contact with a chip-enabled terminal. If a card transaction is done online or taken over the phone, the same risks apply as if the card were a magnetic strip card. Merchants who accept card-not-present transactions should follow their established procedures and controls in verifying the transaction.

What happens if the Chip Card is removed too soon?

If the Chip Card is removed from the card reader before being prompted by the terminal, the transaction will not be able to complete the authentication process. This will result in an abrupt termination of the transaction and non-completion of the sale.

What happens if the Chip Card is swiped rather than inserted in a chip-enabled terminal?

If a genuine Chip Card is swiped instead of inserted in the card reader, the terminal or device will prompt the individual to insert the Chip Card into the terminal's card reader.

My business has never had any problems with fraud. Why should I upgrade to EMV?

As more and more merchants upgrade terminals to be EMV-enabled, perpetrators will likely target merchants who use older technology due to the increasing difficulty of committing card-present EMV fraud. Even though your business does not currently have an issue with fraud, this could change with the increased implementation of EMV technology.

If the chip cannot be read after being inserted in a terminal's card reader, can the Chip Card still be swiped?

Yes. If the chip cannot be read, the terminal will prompt the merchant to swipe the card instead.