EMV Rollout: Are You Ready?

Have you heard the news? From transaction processing companies to the national news media, credit card chip and pin technology seems to be gaining attention due to the upcoming EMV rollout. With doom-and-gloom hype guaranteed to fill the air as the October 1 deadline approaches, competitors are pressuring merchants to be EMV ready… or else! The truth is, these scare tactics are unwarranted, and don’t come close to accurately representing the situation at hand. Let’s strip away all the noise and look at what’s really happening.

Yes, major credit card companies are migrating from magstripe technology to chip technology on October 1, 2015. This is not a payment processing doomsday, but more of a beginning to a new payment-processing era that will be realized through gradual transition. Card issuers like Visa, Master Card, Discover and American Express will spend years creating and distributing chip and pin cards to everyone in the United States, and one day, magstripe technology will disappear. Support for this standard swipe card format will remain until all magstripe cards expire, but issuers will cease production of these cards in lieu of chip technology in 2015.

Will This Affect My Business?

How will this shift affect your business, and how are credit card companies facilitating it? For starters, once the rollout is complete, merchants will be liable for fraudulent charges made using magstripe cards – not the credit card companies. You might see payment-processing companies incite fear to push sales solutions, or even horror stories of business owners fretting about the possible consequences of fraud liability. But don’t panic! Unless your business encounters a high number of fraudulent transactions, there’s no need to jump to anxiety-driven solutions. The first step is to breathe, and know you have options.

Although the amount of fraud we see with our clients is fairly minimal, it’s important that merchants be aware that if they accept a card that is later deemed to be lost, stolen or modified, and is charged back by the cardholder, then the merchant is responsible for the loss incurred with that transaction. It doesn’t impact all chargebacks or disputed transactions – only those to be considered fraudulent. Merchants subject to fraudulent charges are subject to risk and  should be early adopters of the new equipment. If your business sells services, then the risk is drastically lower.

Chip and pin processing is coming, so it’s certainly important to be educated about the situation. i3 Commerce Technology™ recommends that our merchants, especially those in retail, upgrade to not only provide a secure processing environment for their clients but also stay current with the technology that their customers will start using.

How Will We be Contacted?

We will contact our higher-risk clients directly to facilitate the equipment update for EMV capability prior to October 1. EMV is a big shift in the way credit transactions are handled, but it’s not the end of the world for your business. Merchants that process transactions through standalone hardware will need new equipment that’s EMV capable; i3 Commerce Technology™ recommends the VeriFone VX520. Merchants that rely on a Point-of-Sale system, software solution or microsolution at a restaurant are subject to the options made available by their software provider.

The new standard will require some minimal education to teach employees how to work the terminals, as chip technology will require a “dip” into the machine for the duration of the transaction rather than a swipe, but employees won’t start seeing mass migration to chip technology until magstripe cards reach their expiration dates.

Still Have Questions?

For more information about the EMV rollout and your options to maintain compliance, contact your payment-processing advisor directly and ask about the proper timeframe to consider alternative solutions.