The EMV chip technology for credit cards shifts financial liability for fraudulent use to the retailer from the card issuer.
All credit card issuers are replacing existing credit cards with new ones using EMV chip technology.
What is an EMV Card?
EMV enabled cards (also known as Smart Cards) have a chip embedded in them to make it more difficult to steal a cardholder’s information. Credit card issuers are betting this will reduce their costs from fraudulent use.
But one of the ways they are doing that is by transferring some of that liability for fraudulent to your business.
Everything changed October 1st
Up until now, if a card was used fraudulently at your business, the credit card issuer took the financial hit to protect your customer.
Effective October 1st, 2017 that reality is changing big time as they are shifting the cost to your business.
Now if a customer makes a purchase using a smart card and you do not process the charge on an EMV enabled card reader, you may be on the hook for any fraudulent charges.
What’s the risk?
You could be left holding the bag if your customer’s charge turns out to be fraudulent. So instead of having a sale, you’ll be charged back for the money.
Considering the rampant credit card and identity theft fraud that goes on annually, that could be a real financial risk for your business. The odds are that some percentage of your sales each year are fraudulent.
Certainly not your fault as a business owner, but it definitely will be your cost going forward.
So even though it will cost you money to upgrade your card processing equipment to read EMV chips, you really need to understand the financial risks for not doing so.
Mobile Device Card Readers Need Upgrading Too
If you are a small business owner who uses card readers that attach to your mobile devices, you also need to upgrade that equipment. Check with your vendor to order your new mobile device EMV card readers.
EMV card readers will still be able to process the old magnetic strip cards, but eventually those cards will all be replaced.
Upgrade now to protect your business.
Check with your credit card processing company to get more details and to learn what you need to do to protect your business.