Protecting Your Business and Customers with EMV Technology

By Mercedes Garcia,

With each passing day, a growing number of consumers are carrying debit and credit cards in their wallets that have the latest chip technology. While consumers expect to have access to the latest technology to protect their financial transactions, these new chip-enabled cards are only half of the equation. Businesses need to upgrade their card readers to accept this more secure EMV technology – and they need to do so soon.

Beginning Oct. 1, merchants that do not upgrade to terminals that can accept EMV-enabled cards may be held liable for counterfeit card transactions that occur at their business locations. This represents a significant change for businesses because under current federal law, a card issuer absorbs costs related to counterfeit fraud transactions. While EMV technology has been widely used in other parts of the world for years, the United States has only more recently adopted it. The Oct. 1 liability change is the latest step in this adoption process.

This shift to EMV technology is all part of an effort to increase the security of in-person card transactions. An EMV-enabled card moves sensitive information that’s currently stored in the magnetic stripe to a small gold- or silver-colored computer chip embedded in the card. Then, instead of sliding the card, the consumer inserts the chip card into a slot or taps it on a chip-enabled payment terminal, which prompts them to complete the transaction. 

Every time a customer uses an EMV-enabled card to make a purchase, the chip generates a unique transaction code that cannot be used again. This provides a huge advantage over traditional cards, whose magnetic stripes contain unchanging data that can be stolen and replicated over and over again by hackers. 

While a number of large retailers are already accepting credit and debit cards with EMV chips, a recent study by Intuit reports that only half of small business owners know about the liability change and only one in five know about the October deadline. In fact, only 42 percent of U.S. small business owners have made the commitment to migrate to EMV-compatible systems, according to the same survey. 

Fortunately, there are resources available designed to guide these small business owners through the upgrade to EMV technology before the deadline. Master Your Card, a community empowerment program sponsored by MasterCard, offers information and resources to help small business owners understand the benefits of EMV. As part of these resources, Master Your Card has created a toolkit that provides information on how to successfully integrate chip-enabled terminals. 

It’s important that small businesses get on board quickly to experience the benefits of EMV technology. 

Avoid liability and provide greater safety. Accepting chip-enabled cards will protect small businesses from being liable for any counterfeit fraud that occurs at their business. It also sends a signal to criminals that your business is serious about security and protecting your customers’ transaction data. 

Meet customers’ expectations. Consumers want the enhanced security that chip-enabled cards provide and say they will probably use their cards more often because the chip makes their transactions safer.

Leverage other innovations in electronic payment technology. Most EMV-enabled terminals also accept near-field communication, such as touch-and-go and mobile payments. By upgrading your terminal, you’ll be able to accommodate customers who want to pay for purchases using the latest electronic payment technology innovations.

The cost of EMV card readers vary based on the provider and the features that come with the terminal. However, businesses can work with their processors to upgrade their terminals and other equipment seamlessly. Ask about one-time purchasing costs versus leasing fees over time so that you get the best value.

Electronic payment technology is more integrated into consumer spending activities than ever before. Small businesses thrive when they provide convenience, security and relationships built on good service. Businesses that accept EMV chip cards are showing their customers they care about their safety and security. And consumers are more likely to shop where they know their money is safe. 

For more information on EMV, visit www.masteryourcardusa.org/.

Mercedes Garcia is Vice President, Senior Business Leader Global Community Relations at MasterCard. She is a liaison to the Master Your Card community empowerment program, which helps consumers, small businesses and governments get more from their money by using prepaid, debit and credit cards to their advantage.