Frequently Asked Questions
What is Chip Card Technology (aka EMV)?
Chip card technology is an industry standard to help fight fraud. Chip Cards store information in a secure, embedded chip. American Express started issuing chip cards in the U.S. in 2012 and we are working to ensure our cards use this technology in the future.
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How do chip cards work?
A chip card is inserted (rather than swiped) in a chip-enabled terminal to verify the data. A signature or PIN helps ensure the card belongs to the customer. During the authorization process, a unique one-time-use code is created. The transaction is then authorized by the card issuer or the terminal itself.
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What are the benefits of chip cards for merchants?
Chip cards can help to reduce fraud, so merchants could see fewer disputed transactions, which will potentially lower fraud-related expenses. Plus, you can increase the confidence of your consumers because they can feel more secure with their transactions.
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What do chip cards mean for my fraud liability?
Starting October 2015, all major card networks will institute a fraud liability shift in the U.S. This means that whichever party (business or card issuer) has the least secure technology may be liable for certain types of fraudulent transactions. To help avoid this liability, work with your processor or terminal provider today to upgrade to chip card technology.
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What's the difference between chip-and-signature and chip-and-PIN verification?
Signature and PIN are methods to confirm the card belongs to the customer. At the time of sale, the terminal will indicate if a signature or PIN is required and what steps to take next. While chip cards themselves help prevent counterfeit payment card transactions, PIN verification also helps prevent transactions attempted with a lost or stolen payment card.
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How should I prepare?
Contact your processor or terminal provider today to discuss how to upgrade to chip-enabled terminals. Ask about accepting other secure payment technologies, like contactless and mobile payments such as Apple Pay™ and other mobile wallets. Be sure to work with your employees to get them familiar with chip cards and how to use them.
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How much will it cost me?
The cost to upgrade your terminal varies. It depends on factors like the terminal you choose and additional tasks needed to integrate chip-enabled terminals into your network. Your processor or terminal provider can give you more information about your options and costs.
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What other steps can I take to reduce fraud?
Consider other fraud-preventing technologies, like encryption and tokenization. Encryption scrambles data to help protect it as it moves through the payment transaction. Tokenization substitutes data with unique identifiers, or 'tokens', which protect stored customer data.
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