Blog & Company News
Jan 26, 2015
Is Your Business Prepared for EMV?
A major merchant processing change coming in 2015 will be the end of magnetic stripe reader (MSR) technology. The United Sates is actually the last major market to use old-fashioned swipe and sign systems, and it’s a major reason why almost half of the world’s credit card fraud happens here in America. Beginning October 2015, consumers will stop swiping and instead embrace a system based on ‘chip and pin’ technology.
Major card issuers (MasterCard, Visa, American Express, Discover) are leading the way for better security standards. American consumers will be introduced to EMV (Europay, MasterCard, Visa) where cards will be inserted into a slot where POS machines will read a microchip, not a magnetic stripe. Consumers will still be signing to complete purchases during the early phases of implementation, but the new system will eventually enable the use of PIN numbers. In the wake of devastating data breaches faced by major U.S. retailers in the past year, the new technology promises to make hacking attacks much more difficult to pull off.
The adoption of EMV will require retailers to invest in new point-of-sale hardware that will recognize EMV and/or Near Field Communication (NFC) payments. Merchants who do not implement will be held accountable for the loss of consumer data (as opposed to credit card firms who have traditionally bared the burden of costly breaches). The goal of the liability shift is to encourage merchants and card issuers (banks) to adopt more secure standards. If for any reason a merchant does not use the EMV technology after October 2015, then the merchant will now be liable for bogus and stolen card purchases. Based on EMV usage in Europe, the industry expects these changes to account for at least a 30% decline in fraud.
As with all new technologies, it’s going to take a little time to adapt. Although the upcoming deadline is strong encouragement for all payment processing parties to become EMV-compliant as soon as possible, experts expect to see about 50% of banks and retailers to be completely transitioned over by October.
If you’d like to know more about EMV technology and how the upcoming changes may affect your business, we are here to help. Reach us at 800.277.6990
by email, Eppsales@newtekone.com