38% of merchants may not be ready for the switch to EMV credit cards.
EMV. EMV is an acronym that can cause a wide range of emotions in a wide range of people. EMV has made people jump in the air with joy, put their head in their hands in confusion, shake their fists in frustration, and filled back store rooms with weeping and gnashing of teeth.
I’m writing this right now for one reason. I’m writing this to let you know that EMV isn’t all that bad.
So, what is EMV? Well, EMV is an acronym. EMV stands for EuroPay, MasterCard, and Visa. EMV represents the joint collaboration of three companies we are all familiar with. This joint collaboration started in 1994 when these three companies wanted a way to securely and seamlessly have their cards accepted around the globe.
In more modern times, EMV represents the specifications, compliance processes, and test procedures that are managed by EMVCo, LLC. EMVCo, LLC is a company jointly owned and managed by American Express, JCB, MasterCard, and Visa. EMVCo now carries the banner leading the push for EMV all over the world that EuroPay, MasterCard, and Visa started in 1994.
Why does EMV even matter?
Well, in short, EMV has seen success around the globe. It brings multiple advantages to both merchants and consumers. I’m not here to fluff everything over for you, so I’ll try and break it down.
Why EMV matters to you as a customer
Security. EMV cards are far more secure than traditional cards. Why is this you ask? Well, it’s that small metallic chip that you see on the front. That’s a computer chip, and that is part of what sets EMV truly apart. Here’s the technical reasoning: Magnetic stripes on traditional cards contain set, unchanging data. Whoever can access that card can gain access to incredibly sensitive data and customer information needed to make purchases. Unlike magnetic stripes, the EMV chip creates a unique transaction code every time a transaction takes place that cannot be used again for another transaction.
Global interoperability. Another huge corporate word. “Global Interoperability” essentially means that EMV is going to become the standard around the world. Visa, MasterCard, American Express, and JBP intend for EMV to become a medium for global transactions. EMV cards are designed to work all over the world.
Why EMV matters to you as a merchant
Fast transaction times. This one should be pretty obvious. I’ve worked in retail stores and restaurants before. Nothing is more frustrating than having a line of customers, and your slow credit card swipe terminal adds an extra 20 seconds (that feels like 5 minutes) to each transaction in the middle of rush time. I’ve been there, it’s no fun.
Liability shift. Please tell me that these two words make you jump up and down with joy as a merchant. It should. If you aren’t currently, you should be jumping up and down after you read this part, I’m about to start while I type this. Today, you, the merchant are held liable for any fraud that results from transactions on systems that are not EMV capable. For more information on why you’re currently at risk and what you can do, read my previous article on protecting your business and customers data. The great news is that with EMV and when EMV is used, the liability shifts from the merchant to the cardholder. The cardholder will be assumed to be liable for the transaction unless they can prove without a shadow of a doubt that they were not present for, did not authorize, and did not inadvertently assist, the transaction. This liability shift is part of what the October 2015 date is really all about. October 2015 is when this liability shift takes effect.
The EMV liability shift
I brought up the EMV liability shift, and I can’t do so in good conscious without explaining a little more about it and why it is a double-edged sword of sorts. I mentioned before that the October 2015 date denotes the “EMV liability shift”. After October 2015, when credit card fraud takes place, liability technically falls on the entity using lesser technology. This means that if you are a merchant and unprepared, and your technology isn’t up to EMV standards, you’re still completely liable.
EMV liability shift for the prepared
Congratulations! You are in the top percentage of merchants. You’re going to be able to enjoy the liability shift and all of it’s benefits. You are prepared, your business is ready, and Visa, American Express, Mastercard, and JCB love you.
EMV liability shift for the unprepared
Alright. I don’t want to be the bearer of bad news. You aren’t in hot water yet, but you could be soon. If you miss the October 2015 deadline, you could be faced with a costly price tag. The current credit card fraud liability in the United States is around $10,000,000,000. Yes, that’s 11 figures. It’s around $10 billion dollars.
Many people in the electronic payments industry, ourselves included, can see the storm on the horizon. As we get closer to the October 2015 deadline, more and more merchants will realize they are unprepared and can be liable. Merchants and banks will be trying to get the right hardware, software, readers, update applications and all technology. There will be a mad rush to get everything to prepare, and it will be incredibly stressful due to the hundreds of thousands of merchants doing the same thing as you. Especially because this can take up to a month, or longer. You know what they say about procrastination.
Well what can I do?
Don’t panic. We’re here for you. If you are a merchant and unsure of what to do, you need a trusted adviser that can help assess your systems and get you prepared. You need to take this step now before the October 2015 EMV liability shift deadline gets any closer. At POS on Cloud we proudly offer free security and EMV consultations for any merchant, even if you aren’t our customer.
I hope that this article has in some way made you more informed, or helped you understand what EMV is, and what the October 2015 deadline is. If you like what you read, please feel free to contact me at firstname.lastname@example.org if you have any questions, or would like any more information. We’d love to hear from you, and as always, we are standing by.