Have you heard about the impending EMV chip card conversion?
If not, you’re not alone. A recent Wells Fargo/Gallup survey revealed fewer than half (49 percent) of business owners who accept point-of-sale card payments are aware of the liability shift coming in October.
But just 29 percent of business owners say they plan to upgrade their point-of-sale credit card terminals to accept EMV chip cards before the deadline, and 21 percent said they never plan to upgrade.
In other countries, card-present fraud was reduced by 84 percent with EMV chip and PIN implementation, according to Visa and EMVCo studies. Since converting to EMV chip technology, there has been a 69 percent decrease in card-present fraud in the United Kingdom, an 80 percent decrease in Brazil and an 84 percent decrease in Malaysia.
• What is EMV chip card technology, and why is it more secure? EMV chip card technology helps protect consumers and merchants against counterfeit fraud by encoding cardholder information in an encrypted microchip that changes with every transaction. This makes EMV chip-enabled cards more difficult to counterfeit than traditional magnetic swipe cards. Most issuers also may require either a PIN or a signature for additional cardholder authorization, making card-present transactions even more secure.
• What changes Oct. 1? Today, credit card companies are liable for credit and debit card fraud on card-present transactions. On Oct. 1, the liability for fraud will shift. Beginning then, either the card issuer or the merchant who does not support EMV will assume liability for counterfeit card transactions.
• What are the benefits of switching to EMV? There are many upsides to EMVincluding reduced risk of fraud, fewer financial risks and more methods of payment.
• What do small businesses need to know? If you don’t have EMV-enabled payment equipment, talk with your payment provider about upgrade options. Your business may require a simple software update; additional peripheral, such as an EMV-compatible PIN pad.
While the liability shift may mean new technology, different processing and additional costs for many businesses, card fraud is expensive. If your business is liable for card fraud, it could significantly affect your bottom line and reputation, and lead to lost time and money disputing fraudulent claims.
So while switching to EMV technology may seem cumbersome, continued reliance on less secure, magnetic stripe technology isn’t worth the risk.