Small businesses and customers alike are still getting used to EMV (named for the three companies that originally funded the technology: Europay, MasterCard and Visa) or chip-enabled credit cards. Everyone wants to know: Do I insert or swipe? How does the chip really help? And what’s in it for business?
The bottom line all around is increased protection from fraud, which benefits customers, of course, but also business owners. Since October 2015, the liability for fraud charges has shifted has shifted from card issuers to businesses who don’t use the EMV system. That means if your business hasn’t made the upgrade to EMV, you may have to pay up when credit card fraud occurs at your store.
With chip-enabled cards, a unique one-time use code is created for each transaction, whereas the information on a magnetic strip can be used over and over. As criminals learned how to clone magnetic strips from unaware consumers and create counterfeit cards, fraud increased.
Enter the EMV system, however, and that fraud trend is being turned around in the United States, just as it has been in other countries that have switched to the system. In May 2016, Visa reported that businesses using chip-enabled readers saw a 47 percent drop in counterfeit fraud compared to the previous year.
MasterCard says that between April 2015 and April 2016, EMV-ready merchants had a 54 percent decrease in counterfeit fraud costs. On the other hand, those who have not transitioned to the EMV system saw a 77 percent increase in counterfeit card fraud.
Not only does the EMV protect your business, but it also allows you to provide more benefits to customers more easily, such as secure mobile checkout. And since it’s a global system, it also allows you to easily serve customers from around the world.
The bottom line: While it may take a while for everyone to feel completely comfortable with the EMV system, the benefits to customers and businesses alike definitely make it worthwhile.