What is “EMV” and what does it mean for your business?
As an informed business owner you’ve probably heard through a sales agent that EMV is coming to the United States and to your business. While this is true, there is time to learn and prepare for the rollout. Do not fall for strong-arm scare tactics. Some unethical sales people are scaring merchants into a panic, leading merchants to believe they will not be in compliance unless they purchase new terminals right away. This could not be further from the truth. This is a ploy to get merchants to spend money, don’t fall for it! While the rollout is inevitable there are many details that must be ironed out, before secure EMV chip technology can be successfully migrated to the U.S.
What is EMV?
EMV stands for EuroPay, MasterCard and Visa and is named after its original developers. The objective of EMV is to ensure Global Unification of secure card payments. In the 15 years since its inception, EMV has progressed from basic chip card technology to EMV contactless to Tokenization thereby strengthening the security of credit cards and e-commerce transactions.
Also known as Chip cards, these cards are embedded with a micro-computer chip that stores and protects cardholder data. This new technology was created to help protect consumers and merchants from card-related fraud which ultimately may lead to costly chargebacks for the merchant. Credit card theft is on the rise and EMV smart chips enable a more vigorous cardholder verification to protect against counterfeiting or lost/stolen cards.
While the final implementation is scheduled for October 2015, this is when liability shifts from issuers to acquirers to merchants. There are still many matters that must be addressed, including chip production and EMV enabled software cost, operating system updates, consumer education efforts and/or new equipment purchases for merchants. One thing is sure, merchants not in compliance can expect to bear the cost if they have not integrated to the EMV system. To bring the message home Barry McCarthy, President, Financial Services at First Data Corp. says in a Green Sheet article dated 3/10/2014 “Visa and MasterCard have been very clear that they are not moving away from the liability shift that occurs in October 2015,” he said. “October 2015 is a firm date. It’s going to stick.”
We know EMV will reduce fraud risk for merchants, but what will it mean for your day to day business?
Chip based transactions are expected to streamline the checkout process and provide potentially faster checkouts. By enabling PIN based transactions for both credit and debit cards, the merchant will reduce the extra time needed to obtain a signature and the need for authorization referrals. Better yet, contactless payments (waving the card over the reader) will speed up the check-out process 53 percent faster than a traditional magnetic stripe card transaction.
EMV in the future.
Moving into the future, chip based technology will be integrated into a mobile wallet, enabling consumers to pay via their mobile devices.
No need to panic!
No matter the size of your business, you as a merchant have many decisions to make. While there is no government-enforced mandate at this time, it is important to begin the education process now and plan ahead. Your processor should keep you up to date on any new developments as they come in.
- To implement smart card acceptance, merchants would be responsible for upgrading/replacing their POS devices.
- Check with your processor, they will have the most up-to-date EMV rollout information.
- Merchants will want to get a full understanding of when and how liability will shift to their acquirer/processor and ultimately to them.
- Decide if you will be using a contactless or contact connection or both.
TransPay Processing will be happy to answer any question you may have.
P.O Box 13830
Palm Desert, CA. 92255