After years of large data breaches and billions of dollars lost to credit card fraud, in October 2015 the United States will finally catch up to Europe and Asia and switch to the EuroPay, MasterCard, and Visa (EMV) chip credit card protocol. This shift should enhance protection for consumers and reduce the costs of fraud for all.
Andrew Avanessian, EVP of technology and consultancy services at security firm Avecto, says EMV will no longer be “nice to have;” compliance mandates will force all small and medium-size businesses to implement this technology.
“Upgrading all point of sale terminals to accept EMV will not happen overnight, and in fact, Forrester noted that EMV won’t be broadly accepted in the United States until 2020,” he says. “Putting these defensive, in-depth measures in place now ensures systems are secure in the run up to EMV and beyond.”
Purchasing will no longer require a ‘swipe and sign.’ Instead shoppers will enter their credit card into a slot where the machine will read a microchip, rather than a magnetic strip. It’s been used successfully in most other countries for years.
Here are five ways businesses should be preparing for EMV chip technology.
1) Don’t Put Off EMV Until Tomorrow
October may seem a long time away, but it’s important to start your migration now. It won’t be long before customers prefer to shop at retailers that have EMV over those that don’t, so you may as well get started early. “[Businesses] should look to purchase it before the end of the summer if possible, so they can take advantage of the best discounts, as well as make the EMV changes a competitive advantage,” says Don Weary, VP of product management for Sage Payment Solutions. “If the business’s purchase orders support contactless payments, they can also turn it into an opportunity to offer their customers more choice and convenience.”
2) Educate Yourself
If you haven’t been contacted by your bank/processor, contact them yourself. This will allow you to make a well-informed decision with regard to how quickly you need to adopt EMV equipment.
3) Consider Your Software
The move to EMV will not just be about upgrading your card equipment. “Organizations need to ensure their systems comply with the EMV standards,” Avanessian says. “Therefore, it may be easier for retailers to purchase EMV software kernels off the shelf, rather than develop their own.”
4) Prepare for Expenses
Merchants will be asked to invest in new, more sophisticated EMV chip-enabled terminals, an expense that may surprise smaller vendors if they are not prepared. Look into what it will cost you and start saving now to make sure it’s an expense that won’t harm your business.
5) Train your staff
Ensure your staff knows how to run transactions using your new equipment, and why the change has occurred: fraud prevention. “Processing a transaction is very different from the way it is done today by swiping. The chip card is ‘dipped’ into the slot and must stay in the slot until the transaction is complete,” says Carrie Everman, merchant services manager at Washington Trust. “Once your staff understands they might be responsible for their employer losing money, the ‘why’ of using EMV will likely prevent staff from reverting back to the easy ‘norm’ of swiping a card.”
6) Understand the shift in liability
The major payment brands—MasterCard, Visa and American Express, are planning a “liability shift” in October wherein merchants without EMV-enabled terminals will be responsible for point of sale fraud losses. If you weren’t aware of this liability shift and its impact, you need to prepare to be protected from both fraud and the liability for it.
7) Stay Secure
Throughout the entire process, businesses must bear in mind that while EMV will certainly help prevent fraud, it is not a silver bullet to security and stopping your business from getting hacked. This is where innovation is key. “EMV will absolutely help stop card fraud, but other measures must still be put in place to create a solid foundation for security,” Avanessian says. “Companies gather a huge amount of data about their patrons such as name and address etc. and this data is still valuable to fraudsters. Unless retailers take a multi-layer defense in-depth approach to security, they can still get breached.”
The shift to EMV chip cards will be both an expense and an opportunity for retailers looking to improve their security, while offering customers a better service. Make sure you’re well prepared for it this October, and you may even get a jump on your competitors.
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