If not, by October 1, 2015 you’ll need to be...
A nationwide shift in how businesses accept credit cards in the United States is in full effect and will cause businesses to take on extra liability if they haven’t followed suit come October. The new laws shift liability from credit card companies to businesses for certain types of credit card fraud if a business is accepting credit card payments on a non-EMV ready credit card reader. Fortunately, upgrading is easy and business owners may find discounts and promotions on new hardware leading up to the deadline.
What is EMV?
EuroPay, Mastercard, and Visa (EMV) is named after the founding major credit card companies that launched the “Chip and Pin” technology years ago in Europe and elsewhere. This more secure credit card technology requires two things to be successful 1) Chip and Pin credit cards containing microchips which transfer credit card data rather than less secure magnetic strips and 2) EMV ready credit card readers equipped to read the microchips contained on the cards. This technology is designed to decrease in-store credit card fraud, one of the leading causes of credit card theft in the U.S.
On a side note, many small to midsize businesses may be happy to know that EMV ready credit card readers also come equipped with Near Field Communication (NFC), a contactless payment ability, used by Apple Pay and Google Wallet. The use of NFC devices is predicted to increase among customers in the future and having machines equipped with NFC will keep businesses ahead of the competition.
As frequent international travelers may have noticed, Europe made the switch to EMV years ago, with a very encouraging success rate. In the UK, for example, counterfeit card fraud fell by 56% after the switch to EMV. Fraud has actually increased in the U.S. recently (we have almost half of the world’s credit card fraud now) because of our lag in adopting EMV technology. There is a caveat, however. Although “card present” fraud is decreasing with EMV, this is causing criminals to find other means to steal credit card information. The same study that found card fraud decreasing in the UK also found “card-not-present” fraud (mainly online) increase by 79%. Online retailers, or payments made over phone, may be more vulnerable as EMV closes off easy POS breaches.
What will happen in October 2015
The liability shift taking place in October is meant to coerce businesses in to adopting the new technology to help fight fraud, not permanently shift liability in the market. Essentially this means businesses operating with non EMV equipped credit card readers will be liable for card present fraud that may have previously been covered by their processors. As banks are already beginning to issue Chip and Pin cards in preparation for the nationwide shift, your company will assume a big liability if you’re not prepared.
Businesses should take advantage of specials and promotions now in preparation for the October deadline. American Express is currently offering a $100 reward card for businesses to upgrade their credit card readers before April 30th. NTC Texas is also selling EMV ready credit card readers at a discounted rate through May 31st.
Don’t leave your business vulnerable to hackers, one single credit card breach and the associated fees and litigation will cause significant damage to your company’s finances. For more information on EMV credit card readers contact us at NTC Texas.
About The Author
Jordan Hoover is a Dallas native returned home. He graduated Summa Cum Laude with a B.A. from Loyola Marymount University. He of course loves writing, reading, playing music, and learning new things everyday. Connect with him over LinkedIn, at www.linkedin.com/in/jordanhoover
Top photo courtesy of Ben Watts @ Flickr CC