Top Benefits of Upgrading to an EMV Terminal
Although the Oct.1, 2015 fraud chargeback liability shift has come and gone, many merchants are still considering whether the transition away from magnetic stripe point of sale systems to EMV is the way to go. One of the main reasons some are hesitant to take the plunge is the additional expense associated with the new hardware. Although the change may take some getting used to, in the end, EMV terminals offer companies many benefits. These include:
1. Reduction of fraud
Criminals have figured out how to steal and counterfeit the information contained in magnetic stripe credit cards. Reducing fraud is one of the reasons that spurred card providers to introduce EMV-enabled versions, which feature a small chip. This mechanism creates unique data for each transaction, making it much more difficult for fraudsters to get their hands on the information.(1)
Although the chipped cards do fight fraudulent purchases on their own, they can only be completely successful if merchants have an EMV terminal. With EMV chip card technology, the card is dipped, rather than swiped, and remains in the terminal throughout the transaction. Chip cards can be swiped too, but have extra security advantages when processed via EMV chip readers instead.
2. Improved customer trust
Since upgrading to EMV terminals is not mandatory, some businesses will likely not make the shift. However, this move could seriously impact their company. Credit card fraud and identity theft are two major concerns in the world today and customers want to protect their sensitive information by any means possible. Consumers want their transactions to be with enterprises they can trust and EMV compliance is one way to gain that credibility in clients' eyes. Even loyal customers may question their dedication to a company if the business is not considering a shift to an EMV terminal.
To maintain and even increase consumer confidence and satisfaction, merchants should consider making the switch from a magnetic stripe to EMV terminal. Knowing that the business is taking the necessary steps to keep their data safe will go a long way with customers. This action will also keep enterprises competitive in their industry.
3. Increased cost-savings
While many entrepreneurs cite the cost of an EMV terminal as the reason they waver on making the switch, the transition could actually save companies money in the long run. Since the fraud chargeback liability shift took place on Oct. 1, 2015, merchants may be held liable for certain fraud related chargebacks if they process chip cards on a terminal that is not EMV-enabled. Merchants may be held liable for hefty penalties in the event of a data breach. Upgrading to an EMV-compliant terminal is one step merchants can take to help avoid the possibility of a data breach and the ensuing fines and fees.
Furthermore, certain organizations are taking steps to help businesses make the change. Some EMV providers are allowing merchants to trade in their old POS systems or are offering reduced prices for making the transition.(2) Even the Payment Card Industry is making exceptions for merchants that switch to an EMV terminal; a new program waives a merchant's annual audit if 75 percent of transactions are completed using a dual contact and contactless system.
4. Acceptance of new technologies
As businesses continue to evolve, so do the payment methods customers can use. The EMV card transition is a large focus right now, but so is NFC (Near Field Communication) and contactless payments. Luckily, merchants may find themselves compatible with both EMV and mobile payments when they transition to a chip-reader terminal.(3) These methods make transactions easier for customers, improving their overall satisfaction with a company that offers the technology. This combination could also increase a company's competitiveness with its opponents.
The shift to EMV acceptance can be overwhelming. For small businesses that process fewer transactions, the transition may even seem unnecessary. Although the change may represent an extra up-front expense, the benefits are numerous.
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