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accepting credit cards

How is Accepting Credit Card Payments with EMV Cards Different than "Old Credit Cards"?

Brant Schelhaas

No doubt you’ve heard by now about the U.S. transition to EMV chip cards—the new type of plastic credit and debit cards that are embedded with a chip for greater payments security. You might already have EMV-enabled terminals in your stores and have had many customers pay using a chip card. But, do you still have lingering questions about how EMV impacts your business—and your bottom line? Let’s review what the transition from magnetic stripe cards to EMV, or chip, cards means for merchants.

Liability shift

Before the shift to EMV in the U.S., card fraud liability usually fell on the card-issuing financial institution. So, if a customer claimed a fraudulent transaction was made using his or her card, the bank would have to take the associated loss. However, with the coming of EMV acceptance, merchants who don’t have EMV-enabled terminals may be liable for losses associated with fraudulent transactions conducted at their business that could have been prevented with EMV chip card technology. This means that if you haven’t taken the time to upgrade your terminals to EMV and someone uses a fraudulent card at your store, you and your business could be on the hook for the money lost in that transaction. Make sure your business doesn’t suffer from fraud losses by making sure you’ve upgraded all of your terminals to be able to accept EMV chip cards.

New EMV-ready terminals

One of the immediate effects of switching from traditional plastic cards to EMV chip cards is that you’ll need to upgrade all of your POS systems to accept chip cards. Your payments processor should be able to help you with this process. While upgrading your terminals means that you’re shelling out money upfront, your company will ultimately gain peace of mind and save money down the road because you won’t be held liable for certain types of fraudulent transactions that are now merchants’ financial liability. It’s not worth the risk of being held responsible for pricey fraudulent transactions that could have been avoided by installing an EMV-ready POS system.

Customer learning curve

Today’s consumers are so used to swiping their credit and debit cards to complete transactions at supermarkets and big box department stores that they could probably do it in their sleep. With chip cards, though, customers have a new procedure to learn. To process a transaction with an EMV card, the customer inserts the card into the terminal, leaving it in the terminal until authorization has been received and the transaction has been processed. This procedure is known as “card dipping.” Most importantly, while the card is in the terminal, unique data is generated and transmitted that cannot be captured and reused by fraudsters for future transactions.

If you haven’t already, plan to spend a little time training your associates how to “dip” EMV cards into your new terminals so that they are prepared to help customers complete transactions. If your cashiers and customers don't know how to operate the new terminals you've potentially got a lot of flustered customers at your registers.  And unhappy customers lead to longer, slower lines and other unhappy customers.

Make sure you’re EMV compliant to save money and hassle

The U.S. implementation of EMV chip cards has affected merchants in some pretty profound ways. For one, if you don’t upgrade your terminals to accept the new technology, you could put your business at financial risk associated with fraud liability that can be prevented with EMV chips. But with the new systems comes new processes that your staff and customers will need to learn for conducting transactions. Make sure your business is EMV compliant today to arm your systems from fraud and help assure your customers you’re doing everything you can to protect their sensitive payments data, too.

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