With the omnipresence of digital payment processing comes the need for additional security for every financial transaction. EMV technology has become the latest answer to the secure payments issue. Consumers are probably already using it every time they use their credit card. Businesses that have not yet started to accept EMV card options should get on board immediately. Before you get concerned about your organization’s credit and debit acceptance methods with your high-risk merchant account processors, take a moment to understand what this tech is and why EMV compliance matters to your bottom line.
EMV is a new standard for credit cards that includes a microchip for added security. The name actually comes from Euro Pay, MasterCard, and Visa. These three financial industry corporations launched this payment method and made it accessible to all.
This chip stores information about the cardholder and encrypts data to make it difficult for criminals to copy or use the card. This information is then used to generate a unique code that helps to verify the card and prevent fraud. This, among other features, means that EMV cards are more difficult to counterfeit than traditional credit cards.
How do you know that a card has EMV technology? Instead of the black magnetic stripe on the back, you will see a small silver square instead. This also allows for contactless payment processing where you can tap or hover the card over a terminal to transfer money instead of swiping it.
In the United States, all businesses and organizations that accept credit card payments must follow EMV compliance rules. To put it simply, this means that all point of sale (POS) systems must accept cards with chips instead of the older magnetic stripe ones alone. The initial date for compliance was October 1, 2015, but some companies have still not upgraded their equipment.
At first, the new payment processing methods caused some confusion and concern for people. The fact that the chips did not need to be inserted or swiped into a terminal to get information off them made them seem less secure. Consumers were worried about scam artists using data skimmers nearby and gathering their information to steal their identity or money. Better encryption takes care of these issues when it comes to EMV card use.
Besides complying with modern payment processing recommendations and laws, there are also other reasons why businesses should switch if they have not yet done so. Companies that do not accept EMV cards are currently held responsible for any chargebacks from the consumer. The ability to do a chargeback helps protect people from payment fraud, false product or service claims, and in the case of identity theft. Usually, the person is responsible for handling all of this and paying the necessary fees themselves. Without EMV compliance, you must carry this burden.
In the end, it makes sense to upgrade your point-of-sale and payment processing systems to comply with EMV card requirements. Using the most up-to-date methods benefits your security, reputation, and bottom line while giving consumers the flexibility and protection they want.