Does your credit card terminal have the latest anti-fraud prevention?
Over the past two years, card issuers and merchant acquirers have been transitioning their customers away from magnetic stripe cards and terminals that accept those payment cards, to EMV chip cards and the terminal readers capable of reading those cards. Long used in Europe and other global markets, EMV chip cards and their anti-fraud features are now making their way into the businesses and wallets of U.S. consumers. Designed to prevent in-person fraud at the point-of-acceptance, there's also another motivator for businesses.
As of October 1, 2015, the burden of liability for point-of-sale fraud has moved away from card issuing banks and onto the businesses where the fraudulent transaction was made. That means if you haven’t upgraded your POS terminals to accept EMV chip cards and a purchase is made at your business that turns out to be fraud that could be prevented with EMV technology, you will be held financially liable. So, with all that in mind, have you made the switch to a new EMV-enabled credit card terminal? What does it look like and how does it work?
How EMV technology works
EMV chips are a technology developed by three major credit card companies, Europay, MasterCard and Visa, to reduce the prevalence of in-person card fraud. Old credit cards use magnetic strips that store the cardholder’s information. The problem with this method is that the information is static (unchanging) and not encrypted. Any criminal can come along with a cheap card reader and steal the identity of someone using an old style credit card.
However, the big advantage to EMV cards is that the card user's information is stored on a small microchip located on the card. This information is not just encrypted, but also requires authentication from the card reader before it releases any information about the card or its owner. In simpler terms, the EMV card requires a password that only the reader and the card knows before it can be used.
This technology has been in use for decades in Europe. The U.S. is one of the last major global economies to make the switch over to the new technology. To use an EMV card, a customer inserts the card into the card reader and leaves it in place while the transaction goes through. Instead of "swiping" their card, they "dip" it. What’s more, the card never leaves the customer’s possession since he or she dips the card into the reader instead of handing it over to a sales associate.
What a chip-reading terminal looks like
If you have recently purchased POS equipment with a credit card terminal, you’ll need to determine if your card reader is able to accept chip cards. This is pretty simple to see. If you are looking at your terminal and you only see a place to slide the card, you do not have an EMV reader. If your terminal has a place to insert the card, then you have an EMV chip reader on the device. Check with your merchant processor to verify what kind of payments you can and cannot accept with your POS terminal.
Why you should make the switch
Everything you do related to payments and payment processing is in service of making sales. These new card technologies are quickly becoming the standard in the U.S. and, by 2017, every card issued will be embedded with this new chip technology. So, if you fail to upgrade your equipment soon, you can bet you’ll be missing out on sales in the coming months and years.
Combine that with the shifting of liability to merchants, and the switchover is a no-brainer. At the same time, this change in equipment can be a bit confusing—especially if you’re not technologically savvy. The good news is that there is nothing to fear if you are a Vantiv customer.
We’ve designed our card-processing program with this new technology in mind. So, when you partner with us as your merchant processor, you can rest assured that you are using only the latest in credit card processing technology.
If you have been hesitating to make the switchover to EMV technology, now is the time to do so. Not only are you helping your customers get the most out of their card's protections, you are also helping to protect your business from fraud-related losses.