4 Things Small Businesses Need to Know About EMV Chips

| Dec 17, 2015

Frank Sena squareBy Frank Sena, Capital BankCard

If your small business isn’t yet prepared to accept EMV chips, you’re not alone. Capitol Bankcard recently surveyed small businesses and found that over half of respondents were not EMV-ready by October 1, 2015, the date when businesses that had not upgraded their payment terminals became liable for fraud. Another 37 percent of respondents don’t even plan to upgrade in the near future, despite the liability shift.

That said, 63 percent of survey respondents also revealed that experiencing the effects of fraud liability might get them on board with EMV, and 47 percent of those respondents would be swayed if it cost $100 or less. No matter where you stand as a small business, here are five things you need to know about EMV—including why making the switch to EMV processing is so important.

emv-black-credit-card

1. What the Heck is an EMV card?

EMV stands for Europay, MasterCard, and Visa, the three companies that originally created the standard. If you’ve traveled internationally you’ve probably noticed that EMV chip cards are widely accepted outside of the United States. Unlike magnetic-stripe cards used to make credit card payments until now, EMV cards contain an embedded chip that communicates with payment terminals, using a unique code each time and offering higher standards for authentication, so hackers can’t access cardholders’ data.  This makes each transaction more secure and resistant to fraud. As of October 1, 2015 merchants are now liable for fraudulent credit card charges moving forward.

2. EMV Isn’t Just a Solution for Large Retailers

The most recent edition of the National Small Business Association’s technology survey shows that almost half of survey participants had been targeted by hackers. The average cost to those small businesses was $8,700. Bigger businesses might make headlines when a breach occurs, but that doesn’t mean they’re the only companies cyber criminals are after, and it certainly doesn’t mean they’re the only retailers that should upgrade to EMV terminals.

3. Be Ready for Some Changes at the Checkout 

EMV ReaderWhen it comes to processing EMV transactions, cashiers should be prepared to answer some common customer questions and recognize when a shopper is paying with a chip card. The most obvious change is the need to dip a card into a slot at the bottom of the payment terminal, not swipe it. Another thing to note: processing EMV transactions takes a few seconds longer than purchases via magnetic stripe. Cashiers should be ready for questions about this extra time and ensure customers that this new, more secure payment method is worth the wait.

4. Being EMV-Ready Can Also Mean Being Mobile-Ready

Adding new technology to your retail repertoire might feel like a big undertaking, but EMV presents an opportunity to get even more out of that upgrade decision. Retailers can switch to an EMV-ready terminal that also accepts NFC payments like Apple Pay and Android Pay. These “tap to pay” platforms are growing in popularity, and a recent report from Deloitte predicts in-store mobile payment usage will have increased 100-fold by the end of 2015. If you’re not convinced of the EMV benefits just yet, upgrade for the benefits of accepting mobile payments. Consider the extra peace of mind each time a customer dips their card instead of swiping to be a bonus.
 
Frank Sena (fsena@capitalbankcard.com) has been working in technology since 2006 and is a self-taught payments expert. Contact him if you have any questions about EMV or how to upgrade.

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