It’s been more than two years since the EMV® mandate went into effect (October 1, 2015), shifting liability for card-present fraud to whichever party is the least EMV-compliant in a fraudulent transaction. Basically, what this means is that if a customer comes in to your business and charges $1000 on an EMV chip card, and you use the old magnetic card swiper to ring them up, that customer can dispute the charge and you as the EMV non-compliant merchant would have no legal recourse. Not only would you lose the sale and possibly the customer, your business would face the possibility of disruptions in business operations, damage to your reputation and your business would be liable for costly chargebacks.
Despite all that, EMV was not implemented to punish your business, but rather to improve payment security, “making it more difficult for fraudsters to successfully counterfeit cards," according to Julie Conroy, research director for retail banking at Aite Group, a financial industry research company. 1
And according to Mastercard, it’s working. The company reported that counterfeit card fraud is down over 60 percent, based on its top 5 EMV-enabled merchants.2 It’s about keeping your business safe The new chip cards don’t solve all fraud risks— far from it.
For one thing, most chip cards are still produced with the magnetic stripe, and will be for a while. This policy ensures that non-chip cards can be used at terminals that are not yet equipped to read the chip. There are customers who don’t yet carry chip cards, even though market penetration continues to increase. And even with the chip, cards can still be used to make fraudulent payments online or by phone. Nevertheless, you will do far more to protect your business and your customers by making the transition to EMV-compliance.
EMV is a reality and it’s here to stay. In recent years:
More than 6.1 billion EMV cards were used in transactions across the globe by the end of 2016, an increase by about 1.3 billion cards in just 12 months, according to EMVCo.3
It is expected that the installed base of EMV terminals in the US will reach around 65 percent by the end of 2020, while the installed base of mobile POS terminals will reach 8.8 milion4
59 percent of all card-present transactions globally were handled with EMV technology.5
Mastercard announced that 80 percent of its US consumer credit cards have chips, representing an 88 percent increase in chip card adoption since the October 1, 2015 liability shift.2
If you haven’t made the transition, it’s not too late. Here is what to do now.
While switching systems can be a pain, you should look at it an opportunity to reevaluate your point-of-sale solutions.
If you operate a business that accepts credit or debit cards on site, you will likely need a compliant countertop credit card terminal, point of sale (POS) system, or mobile card reader. This can be as simple as a quick change of terminal and a software update. TSYS can show you lots of available options and recommend some good choices for your business.
Don’t let the fear of the unknown take over your business sense. In order for EMV to be maximally effective, all retailers need to participate. As Soumya Chakrabarty, EMVCo Executive Committee Chair, says, “The higher the adoption of EMV technology worldwide, the more robust the entire infrastructure becomes.”3
Some retailers blame cost for their failure to make the shift to EMV compliance. An Intuit survey of small-business owners who were aware of EMV found 57 percent cited the cost of a new terminal or reader as the top reason for slow adoption. But for small businesses with only one or two payment terminals, the upgrade is fairly inexpensive. Some basic EMV card readers cost less than $100.6
While EMV certainly won’t eliminate fraud, your business can take other steps to prevent data breaches. Instead of learning a new skill outside your area of expertise, let a TSYS expert help you protect your customers’ data. We can make sure you are payment card industry (PCI) compliant, monitor your POS system for tampering, set up proper firewalls, configure antivirus software, detect and resolve any weaknesses in your system.