Credit Card Technology is Changing: It Will Impact Your Business
Unlike regular credit cards with magnetic strips that read the same code for every transaction, the new EMV cards (named for Europay, MasterCard, and Visa – the developers of the technology) create unique codes. This effectively means that after a consumer makes a purchase, the data that is stored with the business conducting the transaction can’t be duplicated, since the next time the card is used, it will render a different code.
However, if the credit card is a key, a business’s terminal is the lock. An EMV capable device must be used for the added security of the new cards to be effective. Most cards being issued still come with a traditional magnetic stripe so that they can work at businesses with non-EMV terminals.
Customers can still feel safe in knowing that they are protected. However, the new laws shift the liability of fraudulent transactions from credit card companies, directly to business owners if they are not using EMV reading devices.
The clear answer to what business owners can do to protect themselves and their assets is to upgrade to EMV terminals. The Small Business Administration recommends contacting your acquirer or payment services provider to become EMV-enabled. While implementing a new system may pose a challenge, it not only increases your safety, but it also shows your customers that you care about the security of their information.
As a consumer yourself, it is beneficial to know that for the immediate future, these new cards only provide added protection for in-store purchases. Online transactions will still be susceptible to the same risks as before.
If you are confused or surprised by the transition to EMV credit cards, you are not alone. A survey conducted by Intuit Inc. revealed that 42% of small business owners have not heard of the liability shift deadline. And it’s not just businesses that are unaware. A Forbes article cites that 59% of consumer respondents to a survey have not gotten an EMV card yet.
For more information, watch this webinar recording from the Small Business Administration and view their FAQ sheet: