Advantages of an EMV terminal and tap-and-pay
If you haven't been keeping up with the many data security breaches at companies both big and small, then perhaps it's time you start. It's staggering how many retailers, businesses, healthcare providers and even governments have had sensitive information stolen. The byproducts of these are many, including the use of stolen card data both in online payment presentation, as well as forged credit and debit cards used in-person at the point of sale.
Dominating payments news headlines even more has been the discussion of EMV (Europay, MasterCard and Visa)—chip card issuance and acceptance at in-store points of sale. EMV acceptance is designed first to stop retailers and businesses from accepting fraudulent cards. It's also designed to save businesses and consumers from fraudulent transactions that lead to those ugly chargebacks. It's especially important for your business now that liability for fraudulent transactions made at the point-of-sale is shifting back in the direction of merchants with the implementation of EMV.
Upgrading to an EMV-enabled terminal is a smart consideration to pay not only for these reasons, but for the additional benefits that come with most EMV terminals. These same terminals are also typically NFC-enabled. NFC, or near field communication, is the technology that allows for the increasing tap-and-pay types such Apple Pay, Android Pay and Samsung Pay. So while an EMV terminal is moving the transaction away from swipe and to a dip of the chip card, it is also an enabler of payments from directly from mobile device.
Why you might be waiting
It's entirely reasonable for you to resist upgrading your payment terminals and acceptance options, especially considering there's always some new technology on the horizon that's supposed to literally change everything you know about your business. Of course, you've gotten used to ignoring those claims at this point. However, the face of payments is changing. An older card machine simply can't do what you need it to do anymore — which is to safely and efficiently run modern payment transactions. Just like an old VHS player will eventually start to eat your tapes, you need to be open to upgrading for a better user experience, for the sake of your business. With so much more software-enabled terminal updating, the time is now to consider the benefits of an EMV terminal upgrade.
An extra layer of protection
EMV acceptance has been around for more than a decade, and it's managed to establish itself as the payment standard in Europe. If you've never used one before, you essentially insert a credit card into a chip reader for several seconds while it verifies the information. It's user friendly in that you can see the chip on the actual card itself as a metallic square box on the front. The machine's instructions are also easy to follow for the customer as to when to take it out and when the transaction is complete. The chip is extremely difficult to duplicate, and it also transmits data slightly differently each time, making the patterns that hackers and criminals count on to steal information from your trusting customers. Many will use skimmers which is a tiny device that can be used on a swipe machine that will record data from potentially hundreds or even thousands of credit cards and store it for later use.
EMV terminals that also enable tap and pay transactions offer additional protection for transactions made that way. Each offers its own secure layer through technologies such as encryption and tokenization.
Keeping you from taking the blame
It may seem tempting to just ignore this new technology until it's absolutely necessary to deal with it, but that's a little like hoping your toothache will just go away on its own — especially when it comes to EMV terminals. Every time a credit card is stolen and criminal charges are made, who picks up that cost? Well, you might say it's the credit card company, but what does the credit card company do? The costs end up being distributed across the payments ecosystem. So, back in October of 2015, an important EMV-related milestone was reached in the US—the EMV liability shift. The shift essentially pushes liability for fraudulent transactions back to the least secure participant in the payment transaction. That's a shift away from card issuers as the party most likely to bear liability. Motivating the shift? There is now a better option available (EMV chip cards and terminals) to detect fraudulent cards at the point of sale. One silver lining is the technology has been around for quite some time and has been effective at reducing point of sale fraud.
You need to consider if it's time for you to make the shift to EMV acceptance. Consider the costs and benefits associated with EMV terminal upgrades for your business. As you talk to providers, consider payment processing options and providers that further stream security services right through terminal software and who also enable those tap and pay payment options such as NFC. Based on your specific business needs, you might even consider fully-integrated POS solutions that wrap all of this together while connecting to other back-end systems of your business, such as accounting and reporting.
While you can get away without tap and pay, you really might want to just enable this new technology for your business and your customers. Merchant acceptance may be slow for the newest forms of paying with a mobile phone (where a mobile wallet is connected with another card account hidden behind the scenes), but customers are increasingly embracing this new way of paying. Consider that 20% of all Starbucks' purchases are now done on phones because they implemented an ordering and rewards program that has really connected with their customers. You can bet that other major retailers will not be far behind in trying to capitalize upon this success. However, any merchant can give their customers the option of just tapping their phone to a payment processing machine and finishing their purchase in seconds. You'll certainly stand out in their mind for being progressive and offering the right options. Options that not only keep their data safe, but also increase convenience are making a difference. Considering people's attitudes toward their phone and shortening attention spans, it may be the smartest decision you make.
The use of mobile payments and EMV terminals are on the rise. Is your business planning to keep up or be left behind?