EMV, Smart Chips and Credit Card Security Changes.

Credit cards: as businesses owners, especially retailers, we all take them and need to ensure security for our customers. Credit card fraud is a major concern. By the end of 2015 there will be an estimated $10 billion per year for the total costs of fraud in the United States. Thankfully, measures have been taken to reduce fraud exposure and decrease the likeliness of you becoming a victim.


EMV Technology & The Smart Chip

This is where EMV technology comes in; EMV is a fraud-reducing technology to protect consumers, merchants, and issuers against the losses that come from fraud. This includes, but is not limited to, the use of a counterfeit, lost, or stolen credit card. The EMV chips are embedded with a smart chip (microprocessor) that interacts with the point-of-sale equipment to ensure a card is valid. Additional security comes from the the smart chip and the use of a PIN that belongs to that person/card combination. The EMV chip is an innovation for fraud prevention,adding numerous layers of security against fraud and is exceedingly difficult to duplicate.


EMV. Who Is Liable for Fraud?

While new protection against fraud may ease your peace of mind as a consumer, where does this leave you as an entrepreneur? As of October 1st, 2015, a liability shift has occurred, which will leave whomever has the lesser technology liable.

Who has the lesser technology?

  • If the card is EMV and the merchant is not, the liability shifts to the merchant.
  • If the merchant is EMV enabled and the card is not, the liability remains with the issuer of the card.
  • Seems simple enough, but what if both you (the merchant) and the card are EMV enabled? If that is the case, the liability will remain with the issuer.

Clear as mud? First Data offers a series of infographics for further liability information.

The changes to your business might seem tedious, but EMV will benefit your business as much as it benefits you as a consumer. Accepting EMV cards will reduce your businesses’ exposure to fraud, liability costs, and will increase security at your point-of-sale device. These additional levels of security can have a positive impact on your brand perception among your client base. What might initially seem like a hassle will be taken positively when consumers learn you’re working towards the end-goal of protecting them from fraud.

Upgrade to EMV Enabled POS

As an entrepreneur, updating to EMV enabled point-of-sales systems might seem like a hassle at first. Despite that, EMV is here to stay. The technology and EMV enabled cards have been around since 2002 and are here to stay. A simple upgrade to EMV enabled point-of-sales systems can drastically reduce your liability for fraud and protect the security of your consumers. Once you have upgraded point-of-sales systems, all you have to do is learn how to use it. While the process may seem complicated, the point-of-sales system is all you need to protect yourself from unnecessary liability and usher in a new age of fraud protection. If you find yourself eager to learn more about EMV technology from the consumer or merchant perspective, contact First Data or Chemical Bank for more information.


This article is based on resources provided from Chemical Bank. Please review the PDF Source for more information.