The goal of this white paper is to provide a high-level overview about EMV® to restaurateurs to help
them understand the EMV liability shift and have confidence that the services Pilothouse provides can help them meet their pricing and security needs.

What is EMV?

EMV stands for Europay, MasterCard® and Visa®, the three organizations that initially
collaborated in 1993 to create a worldwide standard for the protection of secure credit and debit
cards at the point of sale, as well as at the ATM. The standard is now overseen by EMVCo, a six member consortium of American Express, Discover, JCB, MasterCard, UnionPay, and Visa which
exists to facilitate worldwide interoperability and acceptance of secure chip-based payment
transactions.

EMV chip-based cards, otherwise known as smartcards, contain a visible contact pad that is
connected to a computer chip containing the information necessary to transact a sale, but
doesn’t contain key cardholder data that is typical of a traditional mag-stripe reader. Chip card
readers use unique codes comprised of cryptographic algorithms providing authentication of
the card throughout the transaction process. EMV transactions are completed by “dipping” the
chip card into an EMV card reader, or by waving the card within a few inches of an NFC-enabled
device, known as contactless payments.

EMV was first introduced to Europe in the 1990’s to help reduce the massive amount of credit
and debit card fraud at the point of purchase. With the introduction of Chip and PIN verification,
participating countries saw user fraud and counterfeiting greatly reduced. For example, UK
retailers saw losses fall 67% since implementing EMV in 2004, and Canada ‘s losses fell from
$142 million to just $38.5 million in one year after instituting the chip card in 2008.

In 2011, when Visa, MasterCard and American Express announced their 5-6 year plan to roll out
EMV, relevant participants – processors, acquirers, issuers and merchants – began to take notice.
The real impetus to adopt more payment security processes, namely EMV, came over the course
of 2014 when merchant data security breaches happened to giant retailers like Target, Michaels,
Home Depot and Neiman Marcus, to name a few. After seeing first-hand that fraudulent activity
was on the rise in the US as mag-stripe technology was now the easiest technology to exploit
worldwide, migration to EMV acceptance in the US is in full swing with the first milestone of
October 1st fast approaching.

To read the entire guide on preparing for the liability shift, please download our whitepaper.