If you haven't been keeping up with the many data security
breaches at companies both big and small, then perhaps it's time you start.
It's staggering how many retailers, businesses, healthcare providers and even
governments have had sensitive information stolen. The byproducts of these are
many, including the use of stolen card data both in online payment
presentation, as well as forged credit and debit cards used in-person at the
point of sale.
Dominating payments news headlines even more has been the discussion
of EMV (Europay, MasterCard and Visa)—chip card issuance and acceptance at
in-store points of sale. EMV acceptance is designed first to stop retailers and
businesses from accepting fraudulent cards. It's also designed to save
businesses and consumers from fraudulent transactions that lead to those ugly
chargebacks. It's especially important for your business now that liability for
fraudulent transactions made at the point-of-sale is shifting back in the
direction of merchants with the implementation of EMV.
Upgrading to an EMV-enabled credit card terminal is a smart
consideration to pay not only for these reasons, but for the additional
benefits that come with most EMV terminals. These same terminals are also
typically NFC-enabled. NFC, or near field communication, is the technology that
allows for the increasing tap-and-pay types such Apple Pay, Android Pay and
Samsung Pay. So while an EMV terminal is moving the transaction away from swipe
and to a dip of the chip card, it is also an enabler of payments from directly
from mobile device.
Why you might be waiting
It's entirely reasonable for you to resist upgrading your
payment terminals and acceptance options, especially considering there's always
some new technology on the horizon that's supposed to literally change
everything you know about your business. Of course, you've gotten used to
ignoring those claims at this point. However, the face of payments is changing.
An older card machine simply can't do what you need it to do anymore — which is
to safely and efficiently run modern payment transactions. Just like an old VHS
player will eventually start to eat your tapes, you need to be open to
upgrading for a better user experience, for the sake of your business. With so
much more software-enabled terminal updating, the time is now to consider the
benefits of an EMV terminal upgrade.
An extra layer of protection
EMV acceptance has been around for more than a decade, and
it's managed to establish itself as the payment standard in Europe. If you've
never used one before, you essentially insert a credit card into a chip reader
for several seconds while it verifies the information. It's user friendly in
that you can see the chip on the actual card itself as a metallic square box on
the front. The machine's instructions are also easy to follow for the customer
as to when to take it out and when the transaction is complete. The chip is
extremely difficult to duplicate, and it also transmits data slightly
differently each time, making the patterns that hackers and criminals count on
to steal information from your trusting customers. Many will use skimmers which
is a tiny device that can be used on a swipe machine that will record data from
potentially hundreds or even thousands of credit cards and store it for later
use.
EMV terminals that also enable tap and pay transactions
offer additional protection for transactions made that way. Each offers its own
secure layer through technologies such as encryption and tokenization.
Keeping you from taking the blame
It may seem tempting to just ignore this new technology
until it's absolutely necessary to deal with it, but that's a little like
hoping your toothache will just go away on its own — especially when it comes
to EMV terminals. Every time a credit card is stolen and criminal charges are
made, who picks up that cost? Well, you might say it's the credit card company,
but what does the credit card company do? The costs end up being distributed
across the payments ecosystem. So, back in October of 2015, an important
EMV-related milestone was reached in the US—the EMV liability shift. The shift
essentially pushes liability for fraudulent transactions back to the least
secure participant in the payment transaction. That's a shift away from card
issuers as the party most likely to bear liability. Motivating the shift? There
is now a better option available (EMV chip cards and terminals) to detect
fraudulent cards at the point of sale. One silver lining is the technology has
been around for quite some time and has been effective at reducing point of
sale fraud.
The reality
You need to consider if it's time for you to make the shift
to EMV acceptance. Consider the costs and benefits associated with EMV terminal
upgrades for your business. As you talk to providers, consider payment
processing options and providers that further stream security services right
through terminal software and who also enable those tap and pay payment options
such as NFC. Based on your specific business needs, you might even consider
fully-integrated POS solutions that wrap all of this together while connecting
to other back-end systems of your business, such as accounting and reporting.
While you can get away without tap and pay, you really might
want to just enable this new technology for your business and your customers.
Merchant acceptance may be slow for the newest forms of paying with a mobile
phone (where a mobile wallet is connected with another card account hidden
behind the scenes), but customers are increasingly embracing this new way of
paying. Consider that 20% of all Starbucks' purchases are now done on phones
because they implemented an ordering and rewards program that has really
connected with their customers. You can bet that other major retailers will not
be far behind in trying to capitalize upon this success. However, any merchant
can give their customers the option of just tapping their phone to a payment
processing machine and finishing their purchase in seconds. You'll certainly
stand out in their mind for being progressive and offering the right options.
Options that not only keep their data safe, but also increase convenience are
making a difference. Considering people's attitudes toward their phone and
shortening attention spans, it may be the smartest decision you make.
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