Credit card processing is due to change by October 2015. Currently, credit cards have a magnetic strip which contains the account information. EMV is the technology that will now be required which is a chip embedded in the card capable of being read when inserted into the machine. If you are currently using a magnetic stripe card reader, you will need to upgrade your terminal to one compatible with EMV technology. The switch to EMV is mainly due to concerns with recent security breaches of large retailers where card information was stolen.
EMV is an acronym that stands for Europay, MasterCard, and Visa, the three major credit card companies responsible for creating the security standards for credit and debit card transactions. EMV has already been adopted by many countries around the world. You may have recently received a new card with the EMV chip, or been notified by your card issuer that you will receive one in the very near future.
EMV cards have a two-factor verification process adding an extra layer of protection against fraud. The embedded chip is used to verify the credit card and a pin number or signature is used to validate the cardholder. The idea is that the extra layer of security makes it more difficult for criminals to use counterfeit or stolen credit cards.
The October 2015 deadline set by the major credit card companies and U.S. lawmakers is significant because it will mark a liability shift from the credit card issuer to the merchant. Currently, the law states that the credit card issuer is liable for any loss resulting from credit card fraud. This liability will hold merchants responsible for fraud resulting from a transaction at their establishment in which an EMV card is used and the merchant does not have a system in place to accept EMV payments.
Even if your current system is PCI compliant, you will still be liable for fraudulent transactions that occur at your restaurant if you do not have a system that accepts EMV cards. PCI compliance and the EMV standards address two different aspects of security. While PCI compliance is designed to protect the consumer’s data once a transaction is initiated, EMV standards are intended to verify that the card being used is not counterfeit. In order to protect your business, your payment system needs to meet additional EMV regulations.
If you don’t currently have EMV technology in your business, contact your merchant processing vendor to discuss your situation and the equipment you’ll need. Now is also a great time to research other companies and find lower rates. Have your statements analyzed by one or two vendors other than your current merchant and see if the rates you are currently charged can be reduced. Need a referral to a vendor? Contact us today for names of those we trust.
Don’t wait until the fall to look into this issue. If you postpone getting the EMV compliant terminals, there may not be enough available to meet demand. Take the time now to make sure you have equipment that will be able to accept these new cards. Failure to do so could result in costly fines to your business.
