The EMV Liability Shift and Your Business
EMV, Apple Pay, NFC, chip cards, chip and PIN, IC Cards ….. Confused?!!! All you want to do is able to accept credit cards and run your business! Bank Card Brokers is here to help! The deadline for businesses to enable their Point of Sale to accept EMV transactions is coming fast - October 1, 2015!!! Do you know what this means for your business or how to comply with the requirement? More importantly - how will your business benefit from more secure payments through EMV and NFC technology?
What Is EMV?
EMV is short for Europay, MasterCard and Visa, an international standard for processing payments of integrated circuit cards (IC cards or "chip cards") and IC card capable point of sale(POS) terminals and automated teller machines (ATMs), for authenticating credit and debit transactions.
EMV payment processing technology has been adopted and enforces by just about every other major country in the world with the United States being one of the last! Why is that? The answer is as simple - money! Business owners and card issuing banks have resisted adoption because of the cost to implement. Our antiquated payment/banking system needed a complete overhaul. By last year payment processing (acquiring banks) had to meet a deadline of upgrading their payment systems to process to accept EMV transactions using Dynamic Authentication. EMV Integrated Circuit Card Specifications are maintained and enhanced by EMVco, an organization collectively owned by American Express, JCB, MasterCard and Visa.
Now, retail business owners will need to upgrade their Point of Sale to include EMV capable readers and encrypted PIN pads to accept credit cards while banks will have to produce the much more expensive chip enabled cards. Ironically these relatively small investments will make huge steps to long term cost savings and in the battle against credit card fraud. Credit card fraud is not only incredibly expensive to the card issuing banks it can also be devastating to businesses. As fraud is reduced the cost to accept credit cards will drop as well!
Is NFC the Same as EMV?
Although EMV transactions are powered by NFC (near field communication) technology they are not the same. NFC can be used for everything from making grocery lists on your refrigerator to transferring files while EMV is actually a payment authentication system that utilizes dynamic authentication. Dynamic authentication is a process by which a cryptographic message is included with each credit card transaction to make each one completely unique. The combination of contactless chip and PIN transactions coupled with dynamic authentication has been proven throughout Europe to greatly reduce the credit card fraud rates experienced by retail merchants and consumers alike. In the US we will utilize a slightly less involved check out with just “chip and signature” transactions when accepting credit card payments.
What is the EMV Deadline?
The deadline for your business to accept EMV credit card transactions takes full effect October 1, 2015. This date has been set by Visa and endorsed by MasterCard is spurred by the fact that the United States is the last major country in the world to adopt this more secure payment technology. This fact has made the US a target for international hackers seeking easy targets for ID theft, credit card fraud, and information harvesting. As a matter of fact credit card fraud in the U.S. has risen an alarming 38% from 2013 to 2014. This is a result of being the last major country to convert to a more secure credit card banking system so international criminals have been focused on the States.
What Does the EMV Deadline Mean to Your Business?
The EMV adoption deadline for merchants comes with both benefits and penalties set by Visa and MasterCard to expedite the adoption of this technology. Merchants who embrace EMV technology before the deadline will benefit. One of the biggest benefits is that merchants who are able to generate 75% or more of their sales from EMV capable terminals will be relieved of their need to annually validate PCI compliance. This will not relieve merchants from needing to maintain their PCI compliance standards but will present an annual time and cost savings.
Additionally, merchants who have installed EMV enabled terminals will receive relief from the PCI audits, fines and fees in the event of a breach. Conversely after the October 2015 deadline merchants who have NOT integrated EMV payment technology at their places of business will have increased liability in the event of a breach. Business owners who choose not to invest in EMV technology will be held liable for all fraudulent transactions that are processed using an EMV card on a non EMV compatible terminal. This liability will include forensic costs, card replacement and the laundry list of other fines and fees that were traditionally charged to the card issuing bank if a merchant was PCI compliant. These costs quickly add up and could easily put the average small business - out of business. This liability shift is a stiff incentive for business owners to take the proper steps and enable their payment systems to accept EMV payments. Visa has released their EMV chip acceptance readiness guide for further reference.
How do You Comply with the EMV Requirement?
Simple! Purchase an EMV compliant credit card terminal either as a stand alone or as a plug in for your point of sale software. A new terminal will run $300-600. How would you like to not only comply with the EMV deadline but do it for FREE and save money on your credit card processing fees? Bank Card Brokers and the Merchant Doctor are proud to offer 100% Free EMV compliant terminals and incredibly low rates! To learn more or simply Apply Today Click Here!
Help keep your customers safe, broaden your marketing opportunities, and reduce your cost to accept credit cards! Get Started with the leading merchant service provider who is committed to Credibility, Legitimacy & Transparency Through Technology and industry leading service!
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