EMV: What you need to know
Credit card fraud liability shakeup looming
October may not feel like it’s sneaking up on us, but it is, and it’s approaching in full swing with penalties, changes and expenses that could make your retail life a living … well, you get the idea.
To start, the very first thing you need to know is that Europay, MasterCard and Visa (EMV) was founded to increase credit card security, unlike the popular myth that it was created simply to cost retailers money and create unnecessary headaches. While headaches may still occur and expenses may still take place, the overall idea of EMV is actually a good thing.
Essentially, EMV involves the swiping of a credit card with the same magnetic stripe you are familiar with — except it also includes a new “chip” that creates a unique transaction code each time it is swiped. Together, the magnetic stripe and chip will help reduce credit card fraud — something many other countries have already implemented — 99.9 percent of European terminals use EMV-based credit cards, while 84.7 percent of terminals in Canada, Latin America and the Caribbean are also EMV-based, according to a recent article by RICS Software in the April 2015 edition of Retail Minded Magazine.
Avoiding fraud is certainly a good thing, especially since 47 percent of the world’s credit card fraud happens in the United States. And since many of your customers are unfamiliar to you — often being tourists or one-time visitors who you are unlikely to see again — it’s important to be as protected as possible. Then again, even with repeat customers, you are open to fraudulent actions simply by accepting credit cards — plain and simple.
A recent article on PaymentsLeader.com reported that “annual costs of card fraud in the U.S. alone are estimated at $8.6 billion per year,” and that “experts believe that figure will rise to $10 billion or higher by 2015, especially if the U.S. does not make significant progress with chip card adoption.” Helping to reduce fraudulent transactions seems like a natural next step for United States merchants and credit card processors to make, which is why Europay, MasterCard, and Visa joined together to introduce this upcoming change. But what exactly does this mean for you, the merchant?
Your Next Steps
Credit card companies have their own liabilities to prepare for this upcoming deadline, but merchants have deadlines they need to meet as well. To help you do this, consider these three steps.
1. Reach out to your existing point of sale (P.O.S.) provider to see if they are prepared. Often, these companies know all necessary steps for their clients to take that will help make the necessary changes as seamless as possible. If they are not familiar or do not have a plan in place, shopping for a new P.O.S. company may be a good idea. Reputable P.O.S. companies, including Vend, GiftLogic, Big Hairy Dog and RICS Software, are among the P.O.S. providers ready to support you now to help avoid challenges later.
2. Identify necessary EMV-compliant hardware you will need. This will vary based on the P.O.S. provider you use — or don’t use, for that matter. However, the idea is to ask questions upfront so you are not surprised later. Additionally, identify what expenses, if any, may be involved in these new hardware updates so that you can be prepared.
3. Create a checklist unique to your store, P.O.S. provider and hardware. This may include scheduling calls with your P.O.S. company, removing old credit card processing hardware and updating with new terminals or hardware and training your team on what they should look for when accepting credit cards beginning in October.
While the steps may seem overwhelming, the good news is that both credit card and P.O.S. companies are ready to help. Make it your No. 1 priority so that you can be ahead of the game — and well ahead of the last-minute rush of others — that has your store ready to go and able to welcome credit cards in October.
— By Nicole Leinbach Reyhle, Special to Party & Paper Retailer