Beat the heat: how EMV can help reduce chargebacks
For many merchants, summertime brings more than just warmer weather and longer days to their business. It brings in more customers, and hence more sales. But for businesses without the EMV technology to process the new chip cards customers are increasingly carrying, an increase in sales can translate as an increase in fraud.
EMV is a relatively new technology, created to reduce fraud by requiring payment authorization requests to access a data chip embedded in the card. The chip generates a unique cryptogram for every authorization, making it theoretically impossible to duplicate an approval code to commit fraud.
As of October, 2015, the card associations and issuing banks no longer accept responsibility for fraudulent in-store transactions involving a chip card. Merchants who do not have the EMV technology required to process a chip card securely will likely be held responsible for any fraud that occurs with that card. For merchants without EMV, this translates as more chargebacks.
If you’ve ever managed chargebacks, you know how cumbersome they can be. And with EMV protocol firmly in place, fighting a chargeback on a chip card can be an impossible feat. Under the best circumstances, providing the proper documentation, in the proper amount of time, and digging up supporting evidence to fight a chargeback is a drain on your time and resources. And if you lose, you not only lose the goods you sold to the fraudster, you also have to pay penalties and fees associated with the chargeback process. And if a chip card was presented, and you didn’t use an EMV-capable terminal, you’ll almost certainly lose.
But increased customer traffic and sales doesn’t have to translate as increased fraud and chargebacks if you implement EMV in your business. Luckily, switching to an EMV-capable terminal can be a relatively seamless and pain free process. There are a number of affordable EMV solutions on the market today, and more being released every day. You can likely upgrade your terminal device and/or upload a patch to your point-of-sale (POS) system to add EMV processing technology with minimum impact to your POS and other systems.
If you use a stand-alone terminal, swapping your terminal for an EMV-enabled terminal is simple and can be done for a few hundred dollars. When compared to the costs of increased chargebacks, the price may be a drop in the bucket, depending on your average ticket price. If you have a fully integrated POS system, you should check with your POS provider to learn what your options are. Many POS providers already have solid EMV solutions that can easily be added to your existing POS. If your system is not eligible for an upgrade, you may consider replacing it with a more up to date system. While it may be more costly, the added ability to accept mobile transactions, which requires the same near field communications (NFC) as EMV, can make the upgrade more appealing and cost effective.
Contact Vantiv today more information about how EMV can help reduce chargebacks.