Credit Card payment fraud and your business: 3 reasons you need to add EMV terminals for payment processing.

EMV Payment Systems

(Newswire.net — March 1, 2016) — In the last few months, people have been receiving numerous new credit cards and debit cards with EMV technology embedded in them. EMV cards use chip technology to improve user safety, better encrypting personal information than the old magnetic strip technology.  But while these new cards have been coming in the mail, many businesses have failed to install the accompanying chip-enabled terminals. The new technology isn’t required, but if you’re not using it yet, you’re putting your business and customers at risk.

Cards and Consequences

While it has been stressed that companies aren’t required to accept EMV cards, as of October 2015, there are costly consequences for those who don’t have the system in place. If a customer experiences credit card fraud, the businesses with the lowest levels of card security are liable for associated losses. This is called a liability shift and it could hit your business.

This consequence seems to have failed as a motivator when it comes to businesses performing these necessary tech conversions. Small businesses that aren’t commonly targeted for fraud aren’t motivated to swap their systems – and that swap can be costly – while the larger businesses that tend to be hit by hackers and other defrauders feel they can afford the hit or that converting is unnecessary, compared to the cost of the consequences.

Meanwhile, stores like Target that were recently hit by major information breaches have been among the first in the U.S. to widely use the technology. This may be part of a rebranding strategy aiming to reestablish customer trust – you can hear the changeover take place any time someone leaves their card in the chip reader too long at a Target store. Elsewhere, however, the transition is quieter. And in most places, there’s been no transition at all.

So, why should companies convert to EMV technology?

The Peace of Mind Factor

Small businesses, especially local ones that know their customers well, have resisted the switch to EMV technology on several fronts, but those who have made the shift point to one key factor – giving their customers peace of mind, particularly in the case of small businesses that handle high value transactions, like wedding boutiques.

While your small business might feel it’s doing enough by checking CVV2 numbers and encrypting your POS system, those aren’t obvious signifiers of transaction safety. Customers are learning to recognize the value of EMV use, so transitioning to this new system now – even past the industry conversion date – can put you ahead of the curve.

Complete Compatibility

Another good reason to switch to EMV compatible technology is that these machines still accept magnetic strip swipes. You aren’t shutting out customers who don’t have the new technology, but rather welcoming a new set of security concerned customers. And for those customers still using magnetic strips – if they incur a fraud charge, it won’t fall to your business, but to the banks that haven’t issued new, up to date cards. In this way, installing the new technology is a win-win.

The NFC Advantage

A third reason you should consider converting to EMV readers is that these readers are the same ones that accept phone-based payment systems like Apple Pay or Google Wallet. These are referred to as NFC mobile payments, referring to their communication system, “near field technology.” While the verdict isn’t clear on how widely adopted these NFC payment systems will be, you can bet they’re part of a wider trend towards payment convenience. So upgrading to EMV compatible tech means getting NFC technology as a kind of bonus.

Even if Apple Pay and Google Wallet are still questionable payment systems, EMV technology isn’t going away. In fact, chip technology has been used in Europe for years to the extent that American travelers sometimes can’t find magnetic strip readers anymore. In the U.S., we’re already late to the EMV game. Small businesses would be wise not to stall any longer.

Source: http://newswire.net/newsroom/blog-post/00092000-how-failure-to-convert-to-emv-is-hurting-your-business.html