If you haven’t heard of EMV technology or read about it in the news, chances are you’ve seen other financial news about credit card fraud – a growing problem that EMV aims to mitigate. With the enforcement of the switch from traditional swipe cards to EMV (Europay-Mastercard-Visa) coming soon in October 2015, many questions remain for both merchants as well as consumers. How well will the transition occur? What difficulties might vendors and buyers face? How will this change affect businesses for both the short and long term? (Want more info on the basics of EMV? Click here!)
While some businesses have moved toward EMV chip reading technology, even big players still remain vulnerable. Plenty of recent headlines point to fraud examples among merchants such as Target, Home Depot and Neiman Marcus, proving no business is immune from a possible infiltration.
The transition of card issuance and liability, known as the liability shift, has many aspects; but one thing we know is there are meaningful benefits to merchants who implement an EMV chip reading system, even before the liability deadline takes place.
- Merchants will be able to better serve international customers.
Though the switch to EMV processing may be new to the United States, it has already been used for decades in Europe, South America, Asia, and other regions of the world. Right now, merchants without an EMV chip processing system are missing out on about 20 percent of international business. With the slow change to the new processing system and fear of switching costs, it is projected that nearly 60 percent of U.S. merchants will miss the mark in accepting chip-based cards by October 2015. Merchants who make the change early on will have an advantage, as they will be capable of cashing in on these EMV consumers much sooner.
- EMV chip implementation is safer for business owners.
Right now, it is projected that nearly 20 to 30 percent of merchants will not be equipped with the right EMV technology before the liability shift date takes place in October 2015. As with any major change in technology, criminals will try to take advantage of the existing swipe system before new protocol takes place. According to Forbes Magazine, only about 70 percent of customers will have EMV cards, leaving the other 30 percent vulnerable to credit card fraud. However, the liability shift requires that the party with the least technology be held responsible for any fraud that occurs.
As it stands now, the credit card issuers are held responsible for financial fraud. All of this will change once the liability shift is implemented. If a customer uses a bank-issued EMV card after the deadline at a business that does not have EMV chip reading technology, then that business will be held responsible for any fraudulent transaction.
(Click here for details regarding the consequences of missing the EMV liability shift.)
- U.S. consumers are ready for EMV-enabled cards.
According to a study conducted by MasterCard, 57