Do you know about the upcoming migration to EMV payment cards? Although this transition, which takes place October 1, 2015, will affect any small business that accepts credit or debit cards in person, almost half of small business owners in a survey by Intuit had never heard about it, and just 42 percent were planning to switch to EMV technology.
Unfortunately, 85 percent of the business owners who said they were not planning to switch weren’t aware that this could put their business at risk. If your company is not using EMV compliant point-of-sale terminals by October 1, you may be liable if certain types of credit card fraud occur as a result of a transaction with your business.
EMV, which stands for Europay, MasterCard and Visa, is a global credit card standard that works to make in-person card transactions more secure. The standard is already in use or being adopted in more than 80 countries worldwide, and has greatly decreased incidence of payment card fraud in countries where it’s been adopted. Unlike most current credit and debit cards, which store sensitive customer data in a magnetic strip, EMV cards have tiny embedded chips. When the card is inserted in a card reader, the chip generates a unique code for each transaction. The code is only used once, making it difficult to steal. Further enhancing security, users must either sign or input a PIN to approve the transaction.
In October 2014, President Obama issued an executive order calling for tougher security measures for consumer finances and requiring U.S. government payment card issuers to issue EMV cards by October 2015. The technology has many benefits, including lessening the risk of payment card fraud for both consumers and businesses, and making consumers feel more secure about making purchases in stores that accept EMV payment cards.
Here are some important steps to take in order to transition to your business:
First, in order to accept EMV payment cards, your business will need EMV enabled point-of-sale terminals and software. Start by contacting the provider of your current point-of-sale terminals to see if they need upgrading or replacement. If your machines are fairly new, they may have EMV capability that just needs to be turned on.
Also be sure to find out whether the POS-related software you currently use will work with the new EMV technology. They, too, may need upgrades or replacement.
The earlier you begin this process, the better. For one thing, you’ll need some time to train your employees in the new system (and learn to use it yourself). For another, payment card processors are currently offering some great deals for merchants who upgrade or replace their terminals with EMV-enabled models. (To avoid having to upgrade again in the near future, see if you can obtain terminals that will work with other new payment technology, such as NFC payment methods like Apple Pay and other mobile wallets.)
Now is also a good time to look for a new payment card processor if you’re unhappy with your current provider or if they are not helpful in transitioning your business to EMV compliance. Compare plan features, upfront costs and ongoing fees to make sure you get the best option for your business.
There are many resources available to provide information and guidance in making the transition to chip technology.
- Visa has an online toolkit for small business owners.
- MasterCard’s EMV Central offers resources and advice.
- American Express has set up a Knowledge Center.
- Intuit offers a a step-by-step guide to EMV migration, quiz to test EMV business preparedness and more.
- This SCORE webinar can be taken online at your convenience.
The more you know about EMV readiness, the easier the transition will be.