Updated January 1, 1 . AmFam Team
With credit card scams costing banks and merchants billions of dollars each year, card issuers are determined to stop fraudsters in their tracks. New technology is making that mission easier with EMV (Europay, MasterCard and Visa) cards. In simple terms, EMV cards are credit or debit cards that have computer chips embedded on the card face for an extra element of security. Where fraud is concerned, EMV can protect your business and keep your customers safe.
The major benefit of EMV technology is the extra layer of protection it provides with in-person credit card transactions. “Chip cards are inserted into payment terminals where the chip on your card and the terminal ‘talk’ and generate a unique code for each transaction,” explains Beth Kitchener, business leader and U.S. Market Communications Expert at MasterCard. “If someone were to use this unique code again, it would be flagged as a fraudulent transaction.” As a result, payment data is more secure on chip cards than cards with a magnetic strip.
If your business handles credit card transactions from customers, it might be time to begin preparing for the transition to EMV. Here are some key points to acknowledge when considering the migration to this new credit card chip technology:
The overall goal is to offer more secure transactions for consumers. “Countries that have already implemented EMV have seen counterfeit fraud reduced by hundreds of millions of dollars,” says Kitchener. In addition, adopting the technology shows customers that your company is serious about the security of their payments and boosts your reputation as a quality vendor to do business with.
The 16-digit account number is replaced with a unique code for each transaction, making it harder for criminals to steal your card information. “Merchants, digital wallet operators and others will no longer store account numbers,” says Kitchener. This offers an additional layer of security and peace of mind for you and your customers.
If you don’t accept in-person credit card transactions or have credit card terminals to upgrade, the shift to EMV may not be as high of a priority. However, as a business owner it’s important that you assess the risk and then consider your customers’ experience to see if it makes sense for your company. If it does, “businesses need to update their credit card terminals to be able to accept EMV cards from customers,” she says. To get started on your risk assessment, check out an industry resource at GoChipCard.com.
While businesses don’t have to update their terminals to accept EMV cards, not making the switch could prove costly. “Beginning on Oct. 1, 2015, the entity with the least secure technology—be it merchant or bank—will be held responsible for any resulting fraud,” Kitchener says. Adopting the technology will ensure that your business offers the best protection against fraud while minimizing potential fees.
If you decide to go the EMV route, be prepared to invest some time and money. “Depending on the point-of-sale system the business uses and the size of the business, costs can include hardware updates, software updates, and employee training,” says Kitchener. MasterCard offers an array of support—including articles, videos and infographics detailing a step-by-step process—to small business owners during the migration to chip cards at EMV Central to help ease any uncertainty you might have in starting this new technology venture.
“It’s estimated that 63 percent of credit and debit cards will contain EMV chips by the end of the year,” says Kitchener. That number is projected to increase to 98 percent thereafter. So hopping on the EMV bandwagon is becoming more and more popular, but that does not mean every person that you do business with will have this new card technology. What if a customer comes in with a magnetic strip credit card? No worries, EMV readers can still accept them.
EMV systems can create a safer business environment for you and your customers and protect your growing business dreams, making it something that you may want to consider. Additional considerations, like revising your business coverage (Opens in a new tab) to reflect today’s changing financial climate, are also great ideas. Take the time to contact an American Family Insurance agent (Opens in a new tab) today and get the protection your investments deserve. Your business may be better suited for new and emerging technologies, too. “The evolution to chip technology won’t happen overnight,” says Kitchener. “But as issuers, merchants and consumers learn about and adopt this new payment technology, they will begin to see a safer, more convenient shopping experience.”