by Julie Pukas TD Bank There's been much discussion surrounding the Payment Networks' Liability Shift associated with Europay, MasterCard, and Visa (EMV) that's due to take effect in the United States this fall. EMV chip-enabled cards add an additional layer of fraud protection for consumers. The cards contain an embedded microchip that turns cardholder information into a unique code every time the card is inserted into a card reader. Overall, the goal of EMV technology is to decrease the potential for counterfeit card transactions, enable secure transactions and prepare for contactless payments.
If you're a merchant, there are a few things you need to know to become EMV compliant. First, merchants will be required to update their point-of-sale systems to accept chip cards, but according to a recent Aite Group study one-third of small-to-mid-sized merchants are unaware of the migration to EMV chip technology.
In October, liability for fraudulent transactions will shift to the transaction participant with the least amount of EMV technology. Card issuers have started to roll out EMV chip-enabled cards. As such, businesses using non-EMV compliant terminals, will assume liability for any fraudulent transactions for EMV chip-enabled cards. This has the potential to be truly detrimental to a business' finances and is a key reason to adopt the new payment standards. Additionally, upgrading to EMV standards ensures your business will be able to accept almost all payment methods.
It's also important to consider the day-to-day impact that the EMV transition will have on consumers. Consumers will be faced with an entirely new payment process, not all EMV payment terminals are identical and not all businesses will have them in place come this fall. As a result, merchants will be the lynchpins to making this transition a success.
Here are four tips for small business owners and merchants to consider when making the switch to EMV payment terminals:
- Investigate your Technology Options: When making a technology investment for your business, it's critical to research and explore the different options. It's worth your while to do the same when looking for new EMV-compatible payment terminals. Merchants should choose the most appropriate technology that meets their unique business needs and customer payment preferences.
- Seek EMV Training: To make the adoption a success, business owners should commit to training staff on the new features and functions of the EMV equipment. According to the U.S. Businesses, U.S. Census Bureau, as of 2012, Vermont employed over 150,000 small business workers. That's a great deal of workers that could benefit from learning the ins and outs of the new transaction process.
Be sure to ask your financial institution if they offer EMV training and take advantage of their expertise. A training session can ensure transactions happen quickly and smoothly.
- Invest the Time:While the switch will indeed require a time commitment and up-front investment, adopting an EMV-compatible payment terminal is a smart business strategy. Not only is it a more secure transaction for consumers,but it decreases the burden on business owners in the event of a compromise.
- Create a Better Customer Experience: Keep in mind that consumers may be faced with different payment terminals when visiting their local merchants. Create a better customer experience by practicing patience during the EMV transition. Consider it as another touch point and way to build trust with your customer by offering guidance through the new payment process.
EMV provides peace of mind for consumers because it's a more secure payment process. Merchants with EMV terminals will require customers to insert the card, write their signature or enter the PIN, and not remove the card until the transaction is complete. The EMV payment process is a more secure transaction for consumers, and a smart strategy for businesses.
Julie Pukas is the Head of U.S. Bankcard and Merchant Services at TD Bank. She has almost 30 years of experience in the banking industry in the Northeast US. She has industry leading expertise in emerging payments, mobile wallets and e-commerce.