Small business debit card payment processing with EMV
Satisfying savvy and empowered consumer means providing options. For millions of small businesses, options start with payments. Today retailers everywhere know that accepting debit cards is an essential part of driving revenue.
Satisfying consumers also means providing security. Fraud related to stolen credit and debit cards generates negative publicity, damaging businesses and consumers.
Yet success stories are abundant, especially in-store counterfeit fraud. EMV chip cards have put fraudsters on the run. Indeed, the recent adoption in the U.S. of secure EMV chip card technology represents a payment security success story.
How can debit card processing with EMV technology help your business? Let’s take a look.
The enduring value of debit cards
Debit cards remain the most popular payment choice among U.S. consumers. A recent survey by the U.S. Federal Reserve on consumer payment choice showed that debit cards account for more than three out of every ten consumer purchases (31.8 percent) in 2017. The Fed reports that debit cards are more popular than credit cards (23.2 percent) or even cash (27.4 percent).
The enduring popularity of debit cards stems from their remarkable utility. Indeed, debit cards offer a wide range of benefits to consumers:
- Purchases are withdrawn directly from consumer checking accounts
- Debit cards have fewer and lower fees than credit cards
- Consumers can access electronic payments without incurring debt
- Debit cards are easier to obtain for those with poor credit histories
Accepting debit cards also benefits merchants. Your business may offer the best product or service at the best price. But if you don’t let your customers pay the way they want, they’re very likely heading to your competitor. You’ve worked far too hard to lose customers over their payment method.
If you’re at the stage of your business journey where it’s time to set up payments, obtaining debit card processing is essential. The math is simple: almost a third of purchases are made with debit cards. No business can afford to turn away a third of its customers.
What is EMV? How does it help keep my business safe?
EMV is a set of global standards that make credit card and debit card processing more secure. Before EMV, each of the major card brand networks had their own security standards. EMV (Europay, Mastercard, and Visa) established a single standard for payment card acceptance.
Replacing the decades old technology of magnetic stripe cards with a secure modern alternative has dramatically reduced the costs of fraud, especially in-store (or “card-present”). Magnetic stripe cards represented the state-of-the-art for credit card security beginning in the early 1970s, featuring the same technology as was used in cassette tapes. Innovative as it may have been, the static technology proved remarkably easy for criminals to intercept, copy, and fraudulently use private financial data.
EMV represents technology several decades more advanced than magnetic stripe. EMV introduces a small electronic chip to payment cards, with corresponding technology built into the point of sale terminals that accept credit and debit cards. This chip contains secure keys that generates cryptographic dynamic data with each transaction. The one-time codes are then encrypted for transit, making it nearly impossible to intercept data to create counterfeit cards.
To encourage adoption of EMV, the payment card industry implemented a shift in liability for fraud. October 1, 2015 marked an important milestone in creating a more secure world of payments. After that date, if a business that accepts credit and debit cards hadn’t updated their point of sale equipment to be EMV compliant, that merchant may be liable for any fraud that could have been prevented with an EMV enabled point of sale.
The EMV chip card success story
Everyone acknowledges that EMV's introduction to consumers could—and should—have been smoother. Old habits are hard to break, and changing from “swiping” to “dipping” was disruptive to long-established consumer habits. Payment technology firms, merchant service providers, and credit card networks invested heavily to educate merchants and consumers on EMV benefits while working to improve the speed and reliability of the technology. Those efforts are now bearing fruit.
Equipped with a better understanding of the importance of secure payments, consumers are now embracing EMV. An April 2018 consumer survey by Worldpay and Socratic Technologies showed that 73 percent of U.S. consumers reported an “excellent” or “very good” experience with chip-enabled debit cards.
Most importantly, EMV is reducing in-store fraud. A March 2018 report by Visa reports that merchants who completed the EMV chip upgrade witnessed a remarkable 76 percent reduction in the costs of counterfeit fraud between December 2015 and December 2017.
EMV isn’t a fraud cure-all. But EMV does represent the state of the possible and shows that coordinated action around technology can and will make for a more secure world for electronic payments.
A future of secure payment innovation
The landscape of payments is evolving rapidly with disruptions from all sides and innovations emerging at blinding speed. As a small business owner, it’s important to select a payments partner to provide for your needs today, and in the future.
Worldpay is a global leader in payments technology and the world’s largest merchant acquirer. Worldpay harnesses the experience of processing 40 billion transactions and $1.5 trillion in payment volume for the benefit of leading enterprises and small businesses just like yours.
Worldpay helps navigate the world of payments, crafting solutions that best serve your business. We help merchants of all sizes with debit card processing, EMV-compliant hardware, mobile payments, and so much more. Connect with one of our payments experts to learn more about how we can help grow your business.