If you own a business, you're likely aware of how much payment transactions have changed over the past few years. Consumers have started to steer clear of checks and cash, while the use of credit cards and digital payments are on the rise. And overall, many businesses have made the switch to more secure, authenticated merchant processing systems, like mobile payments and EMV chip cards.
Today, EMV chip card technology is integral for businesses and can have plenty of benefits over traditional magstripe card technology. However, many businesses, especially small businesses, have not yet adopted EMV technology, let alone know anything about it. That’s why, in this blog, we will be covering what EMV chip card technology is and how it can help businesses who have not yet adopted it.
The Problem With Magnetic Stripe Cards
Before we get into the specifics of EMV technology, we thought it would be beneficial to talk about why magnetic stripe cards are bad news. Think of it this way, would you ever keep a piece of paper in your wallet or purse that has all of your information on it, including your name, card account number, and potentially your pin? Your answer is likely no—however, this is essentially what magstripe cards are: a little card in your pocket that contains personal and confidential information on it. How does this affect businesses? Well, think back when Target had its retail POS software breached in 2013. The system breach allowed hackers to access and steal information from the customer’s credit cards. It’s security breaches like that that influenced the Fraud Liability Shift, which now assigns liability for card counterfeit and fraudulent transactions to the party, or business, that has not made the switch to EMV chip card-enabled devices. Not to mention, magnetic stripe cards can potentially allow thieves to steal a card from the mail or from a person, or even by scanning the magnetic stripe data through wallets and purses using certain devices. Unlike magnetic stripe cards, EMV cards cannot be scanned and applied to multiple new credit cards for thieves to use.
What is EMV Chip Card Technology?
EMV stands for Europay, Mastercard, and Visa. EMV is the technical standard for smart payment cards, ATMs, and payment terminals that optimize transaction security. Unlike cards that use a magnetic stripe during payment, EMV chip cards rely on a dynamic, data-encrypted chip. When customers use EMV chip cards at point-of-sale terminals, a unique transaction-specific encryption occurs. Information from a chip card is less likely to be stolen—from the machine reading it or from the card itself—due to the account data being carried in the embedded chip of the card.
Why Your Business Needs EMV Technology
If your business is not EMV compliant, you may want to upgrade your point of sale terminal. Businesses that do not have this form of technology are putting themselves at risk as they could be susceptible to varying types of fraudulent transactions. When businesses are protected from these sketchy transactions, they are saving valuable time and money as well as the establishment’s reputation to its customers. However, protection against fraudulent transactions is not the only benefit of EMV technology for businesses, check out some other essential benefits:
- Comprehensive Authentications
Similarly to magnetic stripe cards, EMV cards require a PIN or a signature. However, a key difference between the two is that the verification of EMV cards is backed up by the unique transaction code generated by the chip in order to authenticate the use of the card. After this double-check of verification, EMV technology goes the extra mile by securing sensitive and confidential information from data breaches and thieves.
- Reduced Chargebacks
When fraudulent transactions occur, many credit card companies will charge the sale back to the business. When this happens, businesses that do not have EMV technology may, and often will, end up basically giving away their product for free to a thief. EMV has been proven to reduce fraudulent charges when its used, causing a businesses exposure to decrease while profits increase.
- Many Customers Use EMV Cards
If they haven’t already, it is likely that your business’s customers will soon be receiving EMV cards. Nobody wants to be defrauded. It is both a financial liability and a major inconvenience, and not having an EMV compliant point of sale system will soon raise concern with customers. Today, customers expect compliance, and not meeting their expectations could result in a loss of business.
- Secure Online Payments
E-commerce businesses that allow purchases to be made with the use of EMV chip cards are not only protecting themselves against fraud, but the customers and card issuers are protected, too. This is done through a transaction-specific online cryptogram.
- Business Growth
In order to have success, it is important for businesses to adapt to new trends and changes. Every business goes through modernization at some point in time; times change and businesses must adapt. The saying “you have to spend money to make money” has never been more true. Businesses that do not spend will likely end up falling behind, due to an outdated look and old technology.
Does Your Business Need EMV Card Technology?
The move to EMV is long overdue. However, if businesses have not yet adopted this new technology, it is a necessary step in the right direction. If your business is ready to upgrade your point of sale terminal to EMV technology, contact TekCard Payments, one of the leaders in merchant processing services. We offer some of the most comprehensive and affordable processing for small businesses to nationwide franchises with some of the best POS systems in the nation, including EMV POS terminals. Contact our team to learn more!