On October 1st, less than just one month away, the EMV Liability Shift will go into effect for every merchant in the United States. To make sure you are not held financially liable for any fraudulent cards run at your business, it is important that you understand not only the basics of EMV but also what is required of you to comply with these changes. The sooner you embrace the arrival of EMV in the United States, the better, and we’re here to tell you exactly why and how!
EMV stands for Europay, Mastercard, and Visa, and although it is not yet the norm in the United States, it has long been the security standard in Europe. The United States has been trailing behind and now it’s our turn to take on the EMV Liability Shift and “up” our own security standards. EMV cards are smart cards with chip and pin or chip and signature technology. You have probably already seen these cards being used, as they look like the traditional magnetic strip cards that have been used for years but have an added sliver chip on the front of them. The chips store the cards data on integral circuits rather than the traditional magnetic strips.
Although these little chips might not look like much, they mean a big change in how you can make and take payments. EMV chips are “dipped” into readers on terminals rather than swiped. The chips utilize end-to-end encryption and unique codes to process each and every transaction, meaning that if hackers ever steal the card information from a point of sale, it is virtually impossible for that information to be reused for any future transactions. EMV also requires the use of a personal pin code or signature to verify the transaction, adding another layer of security to the process. This increase in security will drastically reduce fraudulent card use, making the upcoming EMV Liability Shift a necessary and welcome change in the industry.
The shift on October 1st mandates merchants to have EMV-compatible equipment so their customers can utilize the chip card technology. EMV equipment has hardware that can take payments from EMV cards when they “dip the chip” or insert the chip on the card into the chip reader. What happens if you don’t make the switch, you ask? If absolutely any fraudulent cards are run at your business, you will be the one held completely financially liable. And as we all know, purchases made with fraudulent cards are never cheap. By switching your equipment to be EMV compatible, you are not only showing your customers that you value the security of their payments but you are freed from the financial liability if a fraudulent card is run. Instead, the financial liability will be on the bank as it has been in the past.
Merchant service providers have been prepping for the EMV Liability Shift for more than a year now. If you have not heard from your merchant services provider, be proactive and reach out to them to ask about what plan they have in place to ensure their customers (you!) are compliant. If they have not preemptively issued you EMV compatible equipment, they should have a course of action laid out for you to receive it by the end of September. It is your merchant service provider’s job to make sure you are aware of changes such as the EMV Liability Shift and help you through the process to the very best of their ability. If yours has not already worked with you to prepare you for the deadline, it might be time to explore a new provider. As a business owner, you already have so much on your plate and credit card processing is the last thing you should ever have to worry about.
The EMV Liability Shift might seem daunting to a merchant, but it doesn’t have to be. In fact, this change will mean less of a headache for you and your customers in the long run. At its core, EMV means more security which is good for consumers and merchants alike.