What Is It ?
EMV stands for Europay, MasterCard and Visa, a global standard for inter-operation of integrated circuit cards (IC cards or “chip cards”) and IC card capable point of sale (POS) terminals* and automated teller machines (ATMs), for authenticating credit and debit card transactions.
A mandate is something the payment network expects compliance with, e.g. a requirement, without which you cannot accept credit cards. EMV IS NOT A MANDATE.
So what is EMV? It is actually a liability shift.
By liability shift the payment networks mean that a non-EMV compliant party will be liable in the event that an EMV chip card is used at a non-EMV-capable terminal, and the resulting transaction is determined to be counterfeit fraud. In plain English, if you accept a counterfeit chip card, you, the merchant, may be liable for that charge. What determines who is liable for the counterfeit charge is who is the least compliant. If you as a merchant don’t have the ability to accept EMV cards, and someone fraudulently uses a card at your location, then you are liable for the funds and any fees or fines associated. However, if you do have the capability, but the cardholders bank hasn’t issued them an EMV card, or the processor hasn’t adopted EMV standards, then the liability switches back onto the issuing bank or processor.
Each acquirer (an acquirer is generally seen as the bank or entity that the merchant uses to process their payment card transactions) must assess their situation to determine if and when it makes sense for them to migrate to EMV. Not all banks/processors (acquirers) are going to make the immediate switch to EMV. If, for example, they deem that fraudulent transactions are an extremely small percentage of an acquirer’s transaction volume, the acquirer may decide to defer upgrading until a later date; they therefore accept the risk that they may accept a transaction initiated by a counterfeit EMV chip card and as a result they may be liable for that counterfeit fraud.