Chip and Pin Credit Cards
3 Things You Need to Know About the New Chip and Pin Credit Cards
Ready to dip rather than swipe? More businesses in the U.S. are embracing new chip and pin credit cards and technology, especially since the EMV liability shift that went into effect October 2015. The chip card technology has customers insert, "dip", their payment cards into a reader as opposed to swiping the magnetic stripe through the machine. Known as EMV - named after Europay, MasterCard and Visa - the credit cards offer better fraud security for both users and businesses. (1)
The shift over to chip and pin credit cards continues its rollout across the U.S. as consumers are reissued the new cards and as merchants of all sizes upgrade and enable in-store terminals that include the necessary EMV technology. And while the EMV fraud liability shift is in effect, some smaller brick-and-mortar stores continue using their old machines, Payments Views noted. (2) However, it's just a matter of time before more businesses adopt the new readers that require consumers to insert the chip end of their debit or credit card into the device.
As a small-business owner, what do you need to know about these new cards? Here are three things to keep in mind as your store makes the switch to chip and pin credit cards:
1. Is it too late to replace my old card reader?
The answer is no. You still have time to purchase an EMV-enabled machine, but you should get one sooner rather than later, as businesses are now much more likely to be on the hook for customers who make fraudulent transactions. Large retailers already adopted the new EMV readers to protect themselves from counterfeiters and forgers.
If you accept a credit card payment via magnetic stripe and it turns out to be fraudulent, there's a better than good chance that the money lost is the responsibility of the store rather than the credit card company. That means you'll be liable for the value of and costs associated with chargebacks. EMV cards are much more secure than their magnetic stripe counterparts since it's virtually impossible to replicate the role of the computer chip that the chip cards hold or the cardholder information associated with it.
For now, many EMV cards still feature a magnetic stripe across the back so customers may still transact with a business that hasn't made the switch to the more secure readers.
2. How will EMV cards affect my store?
While implementing a new credit card reader may seem like a pain to smaller retailers, the added security they provide can be a boon to shop owners. You and your employees don't have enough time to scrutinize every customers' handwriting or their IDs whenever they try to pay with a credit card. Thankfully, the chip in EMV cards contains a four-digit pin unique to the customer, making forgers and card-skimming that much harder.
However, some of the new cards still require the patron to sign or enter a pin number after dipping the card in the slot, depending on the amount of money the transaction involves. Also, keep in mind, dipping and reading the computer chip-enabled card takes more time than the usually fast swipe and signature. Your checkout lines could grow longer, so prepare for this issue with multiple register lanes if at all possible.
Business Insider noted the new machines could also cause customers to forget their cards, as they have to insert the card into the device and leave it in there for a few seconds. Some retailers such as Target have their card readers beep to alert patrons when it's time to remove their cards from the machine. (3)
3. How will EMV affect my online store?The bad news about these relatively new cards is they can't protect you from fraudulent payments made to your online store. The chips only work with the POS systems in brick-and-mortar shops. If your operation also includes a webstore, ensure your online checkout process has solid security in place. Business Insider warned that thieves could direct the majority of their scams to a store's online presence as EMV cards cut down the number of fraudulent transactions being made in person.
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