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EVO Payments International


A Merchant’s Guide to EMV Compliance

Feb 14, 2018

Credit card transaction

The Oct. 1, 2015, EMV “liability shift” has come and gone, leaving the U.S. small businesses that haven’t installed EMV solutions more exposed to the threat of credit and debit card fraud.

The transition to EMV, or so-called “chip cards,” has been a confusing and challenging process for businesses across the board, but small businesses appear to be particularly at risk. A range of studies shows the vast majority of the nation’s 30 million small businesses were unprepared for the October shift in fraud liability, with many not even fully aware of the recent changes.    

If your business hasn’t achieved EMV compliance, you’re not alone. But you need to be aware of the new risks you face, and you need to build a game plan.

EMV Liability 101

EMV cards contain computer chips that are much harder to reproduce than older magnetic stripe card technology.  The shift to EMV is designed to reduce fraud in situations where cards are used in person.  But reading those chips requires updated payment hardware and software that enables cards to be “dipped” as opposed to “swiped.” 

The Oct. 1 deadline signaled the shift of liability from banks to business owners when it comes to fraudulent and stolen credit cards. If your business is unable to process EMV transactions and a card is instead swiped for a fraudulent transaction, you may be on the hook to reimburse the cardholder.

What’s more, not only do you face liability from use of stolen or counterfeit cards for the first time, non-EMV-compliant businesses also run new risks from dishonest customers.  Chuck Prince, vice president of operations at National Computer Corporation, saw these situations unfold during EMV transitions years ago in Europe and Canada.

 “A lot of cardholders were actually savvy enough after making a purchase to call their credit card providers and say, ‘I wasn’t there. That wasn’t my transaction,’” Prince said about Canadian markets, where EMV has been implemented for years already.

The Path to EMV Compliance

Preparing for the switch will mean upgrading your POS hardware and software.  Depending on your business and current POS solution, an upgrade could mean anything from a new $200 card reader to a substantial system overhaul.

For many businesses, POS systems provide much more than transaction processing, however; they’re also delivering a wide range of business intelligence, helping to manage everything from inventory to schedules to promotions.  For these businesses, it’s critical to make sure that an EMV-compliant upgrade will also meet their specific business needs.

While a practical path to EMV compliance makes sense, Prince pointed out that business owners shouldn’t consider the transition optional, even if they’re willing to accept the added risk.  As time goes on, consumer comfort will take on more significance.

“I think the cardholders are going to start to resist shopping at places that do not have the new technology,” Prince said. “That’s what we found in a lot of markets overseas. It wasn’t the threat of liability so much as it was the cardholders driving EMV by their shopping habits.”

Best Practices During the EMV Transition

The following advice can help business owners minimize the risk of fraud as they evaluate EMV-compliant solutions:

  • Be sure to check that the customer’s signature on the receipt matches the signature on the back of their card.  This will verify that the cardholder is, in fact, the card owner.  If there is no signature on their card, ask for ID.
  • Ask for a customer’s ID if the amount of the transaction is larger than your average transaction size.  This policy has already been implemented at many of our nation’s largest retailers.
  • When a customer’s card is “swiped” through the card reader, make sure that last four digits of the card number that print on the receipt match the last four digits embossed on the front of the card.  Some POS systems will prompt the cashier to re-enter those digits from the card to make sure they agree with the value obtained from the card reader.

The Silver Lining

There’s no question that the EMV transition puts a burden on business owners, but the shift will also bring longer-term benefits, including: 

  • Improved Security: EMV upgrades give businesses the opportunity to adopt additional transaction security measures, such as point-to-point encryption and tokenization, which allows for increased protection against data breaches and hacking attempts.
  • Mobile Wallets: Prince expects that EMV will lead to wider capability among small businesses to accept mobile wallet platforms like Apple Pay and Android Pay, increasing convenience for consumers and efficiency for merchants.
  • Enhanced Marketing: Prince predicts that EMV will enable enhanced loyalty programs and other marketing capabilities over time. 

For a wide array of small and mid-sized businesses, an expert POS partner can make all the difference in a smooth transition path for EMV.  

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