Switching to EMV has worked small business owners up into a frenzy – it’s confusing, the new smartcard readers are expensive, and it’s unsure exactly when magnetic strips will be taken offline.
Here are some important facts you need to know about EMV cards and processing.
Why Is The Industry Changing?
The industry has been changing for years. Right now, most cards being issued are magnetic strip-driven. But, 120 million Americans already have EMV chip technology embedded in their cards, with half a billion new cards coming online by the end of 2015.
In Europe, most cards already employ this technology, with EMV being the standard.
If you’re not caught up by now, it’s time to search www.merchantservicesuk.co.uk for a new terminal and upgrade your existing hardware.
Benefits Of Changing Your Terminal
By changing your terminal, you gain the benefit of having a more secure transaction experience for the customer. You also lower your liability risk and most likely qualify for lower transaction costs from your merchant services provider.
EMV technology supports enhanced verification methods and, unlike the old magnetic strips on cards, EMV can be used online to authenticate without incurring a keyed-in transaction rate and the associated risk.
What Is An EMV Chip?
An EMV chip is a computer chip embedded into a credit or debit card. These chips allow businesses to accept secure payments with enhanced authentication. The merchant services provider is able to verify payment, and the customer is able to digitally sign for the transaction using information embedded in the chip.
A PIN or signature then authorizes the transaction.
Why Are They Better?
The main improvement to the card is enhanced security. Fraud is easy with magnetic strip technology. Small readers, called “skimmers” can easily scan magnetic strips for information. This is a problem when a waitress or bartender, or anyone else takes your card and disappears with it to process the transaction. Your personal data is now in their hands.
But skimmers can also be placed over existing terminals at ATMs and gas stations (or any other unmanned terminal), looking like legitimate terminals, when in fact they are set up to steal your data.
With EMV chips, this is difficult or impossible, since the chip verifies the identify of the person before the transaction occurs. So, even if the thief were the steal your credit card data, they wouldn’t be able to do anything with it.
What Are The Risks Of Non-Compliance
It’s a scary word: non-compliance. But, it’s also a word that you’re likely to hear if you don’t adopt the new standards. Failing to move over to the new card readers means that you’re probably not going to be able to take payments for some kinds of goods and services or, at the very least, pay more for transactions using old magnetic strip technology.
Under new liability rules, you may be liable for any credit card fraud resulting from the use of a traditional swipe terminal. That means that if a customer swipes at your business, and the card data is stolen, you could be sued and put out of business.
And, Visa, and Mastercard, could revoke your ability to accept electronic payments.
It’s an expensive way to conduct business, and will push you, and every other business, to adopt the new standard or continue to do business in an impractical manner – risking closure with each swipe.
Alexander Brown has been worked in the IT industry for a number of years and enjoys the challenge of keeping up speed with pace of change and updates in technology. He is a regular online contributor on a number of websites and enjoys sharing his insights with a wider audience.