If you accept credit cards at your place of business, you need to be aware of coming changes. The United States is catching up with the rest of the world with what is called chip and pin or EMV technology. EMV is a joint collaboration between Europay, MasterCard and Visa (thus the name EMV) to bring chip and pin technology to the market. This technology is coming not a moment too soon as credit card fraud is increasing year over year at alarming rates. According to WorldPay, credit card fraud increased 38% in 2014 over 2013 and accounted for $38 billion in fraudulent transactions last year.
What is chip & pin technology? New credit cards will have a microchip inside them (pictured above) that will generate a one-time token at the time of purchase. Users can sign or use a PIN to complete the purchase. This is a difference from a magnetic stripe swipe which reads a static number from the card which can be stolen and used for fraudulent purchases. Chip and pin technology is used for “contact” purchases which basically means in-person transactions.
If your business has a point-of-sale system or a credit card terminal to process credit cards, you need to be aware of the following: Beginning October 1, 2015, you as a merchant will be liable for fraudulent transactions if a customer presents you with a chip-ready card and your business uses the magnetic swipe to process the transaction. Thank you to WorldPay and MasterCard for the following graphic explaining the liability landscape.
If you are using a Point of Sale (POS) system, your POS vendor should be preparing you for these changes. There may be changes required in the middleware such as the payment processing software (PC Charge, Payware etc). If you process via a terminal, you will need to make sure you have the proper hardware to process chip-enabled card transactions. A nice side benefit is that most of the new credit card terminals will also allow your business to accept tap and pay or NFC (Near Field Communication) payment methods like ApplePay and Google Wallet.
As a merchant, you are a key cog in the wheel when it comes to credit card security. Credit card fraud has cost American businesses far too much money over the last decade because of reluctance to adopt the proper security technologies. The time to increase security is now with the adoption of EMV or chip and pin technology.
Need help? Give Colden Company a call and let our experts help bring your business up to speed with this security technology. Call us at (888) 600-4560 or email us at firstname.lastname@example.org, or see us on Facebook or Twitter.