In the last few years, you’ve probably received new credit and debit cards that have silver imprints on them. Those little silver squares, in fact, are a form of high-tech security because they’re actually computer chips, designed to help reduce consumer fraud.
It’s important that your Point of Sale (POS) system is compliant with this EMV (Europay, Mastercard, Visa – the first companies to pioneer the method) technology, which also limits liability for those institutions that issue credit or debit cards regarding fraudulent payment chargebacks. A negative of the EMV technology is the fact that payment process times are slower with chipped cards than with magnetic stripe cards, although some EMC cards now have NFC (Near Field Communication) technology, which is the fastest option available now.
For your small business, being EMV compliant means that you will simply need to upgrade your terminal to a model that processes credit and debit cards that have the EMV chips or magnetic strips. EMV compliance rules first went into effect in October of 2015.
If your business doesn’t comply with the law, don’t worry – you won’t get into any type of legal trouble. EMV compliance protects your business from liability – however, it can cause some big issues if you choose to remain non-compliant.
If you decide to continue processing credit and debit cards that only have the magnetic strip, your business will be held responsible for any fraudulent charges that are made by something using a card with a chip in it. For instance, if someone charges $1,500 on a card that has the chip and your business uses the old magnetic card swiper to charge them, they can dispute the charge. Because you are not EMV compliant, you would be held responsible.
Changing systems might be a bit of an aggravation but as a business owner you should simply consider it a way to reevaluate your POS system so that you will get better service and save money. For most small businesses that process a considerable number of small transactions, the cost of upgrading to an EMV compliant system could be more than you want to spend but, in the end, you’ll be protecting your company against POS fraud losses by upgrading.
Don’t let the costs of upgrading your POS system cause issues for your business – in the end you’ll be happy – and feel more secure – with the decision.
EMV technology still isn’t perfect
EMV technology does not prevent data breaches nor can it protect cardholders in the event of a data breach.
The technology makes card-present fraud more difficult, but not impossible.
Your business may still need to take other steps to prevent data breaches, such as hiring a third-party data security company.
Instead of learning a new skill outside your area of expertise, let an outside expert protect your customers’ data.
They can make sure your 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.
Even so, the simple theft of an employee’s laptop with valuable customer data can cost a business millions–
And you may not even realize how bad the damage is at first.
Consulting firm Deloitte found that 90% of the impacts of a data breach on a business are hidden and don’t fully surface until two or more years afterward.
These hidden losses include higher insurance premiums, disruptions in business operations, loss of reputation, and lost customers.
EMV Compliance: The Good, The Bad, & The Ugly
The new chip cards don’t solve all fraud risks— far from it.
Most EMV cards still contain magnetic stripes; without them, they couldn’t be used at older payment terminals.
Further, chip-enabled cards can still be used to make fraudulent payments online or by phone.
Industry experts say it will probably be several years before the transition from magnetic stripe to EMV cards is complete.
The important thing for small business owners looking to protect themselves is to have an EMV-compliant system in place for in-person transactions so that fraud liability doesn’t fall on their business.
Don’t let the costs of upgrading your payment terminal get you in trouble – a working capital loan or an equipment loan from one of the lenders in our network could help you get up to speed!