U.S. banks are switching up the insides consumers’ credit cards by adding EMV chip technology, (an acronym for Europay, MasterCard, and Visa) the occurrence of credit card fraud is greatly diminished, as EMV chips are extremely difficult to counterfeit. Motivated by a recent spate of security breaches in stores belonging to big name retailers, more banks are choosing to switch their magnetic strip cards to EMV chips as a way to alleviate fraud.
So, if you are a merchant, how exactly will this affect your business? Below are several facts about EMV chip technology.
- Beginning October 2015, if a customer pays with a fraudulent chip card, and you do not have an EMV card reader, banks will no longer accept liability for fraudulent transactions, meaning your business bears the brunt of the fraud. For example, if a customer makes a purchase for a $50.00 item with a fraudulent EMV equipped card, and you do not have an EMV reader, your business eats that $50.00 charge. Banks will no longer cover the cost if the merchant is not EMV chip reader capable. Though EMV readers may be expensive to include in your POS system (set-up costs $500.00 on average), protecting yourself from absorbing the brunt of fraud will pay off in the long run.
- EMV technology is nothing new! Most of the world, including Europe, has been using chip cards for years. The United States was actually the last major market still using magnetic-stripe-only cards.
- Chip cards are inserted, or “dipped,” into the payment device and left in place for the entire transaction as the reader and card communicate. No more swiping or dealing with worn out magnetic strips!
- EMV in numbers:
o 86% percent of financial institutions plan on issuing EMV debit cards in the next two years.
o 78,800 merchants are currently EMV chip-activated.
o 575 million EMV cards are to be issued by the end of 2015.
o 59% percent of retail locations will be EMV-compliant by the end of 2015.
The numbers don’t lie. EMV chips are the new upcoming popular form of payment. Don’t let your business get left behind, update your POS terminals with EMV readers for better safety, and better business.