EMV technology has been a standard form of payment acceptance in Europe, but the U.S. is finally taking hold of the credit card infrastructure in light of the growing threat of credit card fraud. EMV technology includes a microprocessor chip of encrypted data to make payment transactions more secure using a “Chip and Pin” to verify the cardholder during payments to decrease the risk for fraud.
Unlike magnetic strip transactions, where only the credit card number and expiry date are processed, the chip-based transaction contains numerous pieces of information to be exchanged in order to complete the transaction. The complex processing adds additional security support to payment applications.
“These new and improved cards are being deployed to improve payment security, making it more difficult for fraudsters to successfully counterfeit cards,” said research director, Julie Conroy.
For merchants, this means the new technology must comply by the new liability rules, or they will face costly charges should fraud occur. For customers, this means a more secure payment process.
To become EMV compliant, merchants need to upgrade their existing terminals to support EMV technology. On average, the cost of an EMV compliant point-of-sale terminal is around $500. There are many suppliers, such as NPA Solutions, to help merchants become EMV compliant and ensure a smooth transition to EMV technology.
Nearly half of all credit card fraud around the world occurs in the United States, making up 47 percent of worldwide credit card fraud. The US is so susceptible to credit card fraud due to the lack of EMV technology. Countries who have made EMV chip based cards the standard have decreased credit card fraud, which is why the United States in now following suit with the October 1, 2015 deadline.
After recent major data breaches in the US from large retailers like Target and Home Depot, the US is finally following the rest of the world with pin and chip technology. With this move, merchants must adopt the new EMV technology or they will be held 100 percent liable for any fraudulent charges. Credit card issuers will no long cover the charges, placing noncompliant businesses at risk for hefty fraud charges.
Businesses can add liability protection by adopting the new EMV technology before the October 2015 deadline. Implementing the new technology enables enhanced security features through chip-activated terminals that require chip cards and chip-activated terminals to work together. As a result, it’s nearly impossible for cards to be counterfeited, drastically reducing credit card fraud.
Overall, EMV technology is good for business, not just for the liability protection. You’ll be investing in your security, as well as your customers’ security, who will now begin to demand merchants to be EMV compliant. In addition, investing in the new technology will positively enhance your brand as you open the door to more convenient services to your customers, like digital and mobile payments.
Now is the time to prepare for your future by adding liability protection to your businesses with the EMV chip cards. NPA Solutions offers the Clover Terminals to become EMV compliant before the October deadline. To learn more about the risk for EMV liability, contact NPA Solutions today!