Is Your Small Business Ready for EMV Compliance?Stephanie Faris
Is Your Small Business Ready for EMV Compliance?
The credit card processing industry is currently undergoing a gradual shift. While credit cards have traditionally been processed using a magnetic stripe, a new technology will soon have retailers using a smart chip. This type of transaction is more secure and can store more information than magnetic stripes, helping protect merchants and card issuers from costly fraud.
Called Europay, Mastercard and Visa (EMV), the technology is already in place in almost every country but America, including Europe, Brazil, Canada, and the Middle East. The deadline for U.S. businesses to cease accepting magnetic stripe and adopt EMV technology instead is October 1, 2015. But according to security experts, many small businesses are still behind in making the transition. If your small business hasn’t begun, here are a few things you should know.
Security experts are concerned that retailers may not realize the length of time such a shift will require. The transition to EMV may not be a matter of simply upgrading terminals to their compliant counterparts. Processing equipment is often tied to a business’s software, including back-end accounting solutions, that may require an adjustment once the new system has been implemented. Once in place, a business’s employees and customers will need time to adjust to the new technology. With EMV, for instance, customers and employees will dip the card into a terminal and waiting for it to be approved rather than trying to execute a swipe at just the right speed.
Cost to Upgrade
One reason many businesses may still be putting an upgrade off is cost. Research firm Javelin Strategy & Research estimates businesses will be required to pay between $500 and $1,000 per payment terminal. If small businesses haven’t already added this into their 2014 budgets, they may have no choice but to wait until 2015 to make the change. However, if problems are encountered during the upgrade process, this could be a costly wait.
Cost of Upgrade Failure
Businesses will still be able to accept magnetic stripe payments after 2015 and many consumer cards may still have both the stripe and the smart chip installed. However, businesses will lose the fraud protection they currently have with credit card issuers if they haven’t upgraded. That means if fraud occurs, the liability will rest on the business rather than the card company, which could be extremely expensive, especially if fraudsters go after businesses still using the outdated technology. A detailed schedule of the dates when liability will shift to the least EMV compliant party in a transaction is available on the Verifone website.
Businesses that still have not upgraded their technology can check with their processing service provider for assistance with purchasing the right equipment and ensuring it will work with the existing infrastructure. Businesses should also ensure payment gateways are EMV compliant and their processing service is taking the necessary measures to handle upgrades. By beginning the process now, small businesses can have systems in place and be trained to handle them before the date arrives that retailers are expected to have EMV-compatible systems.
PS - Want more attention, and more impact, and more sales for your business? We created a complete Personal Branding Framework for business owners just like you... get it here.