Should All Small Business Owners Consider EMV®¹ Technology?

The article content is provided with our sponsor, Bank of America Merchant Services.

A recent change in how payment cards are processed allows small business owners to mitigate their risk of being defrauded. The major card brands have implemented EMV (EuroPay, MasterCard® and Visa®); known as “chip” card technology in the U.S. EMV chip card technology heightens security through the use of stronger authentication that reduces the value of stolen data by helping prevent criminals from successfully completing face to face fraudulent card transactions. The card brands have also introduced “liability shifts” related to counterfeit fraud losses when chip cards are used on and after October 1, 2015 in card present transaction.

Merchants who have not adopted EMV technology as of October 1, 2015 will be liable for counterfeit fraud losses when a chip card is used. Compared to magnetic stripe cards, EMV cards store customer data on an embedded smart chip. When inserted into an EMV reader, a chip card generates a unique encrypted transaction code that can only be used once. Since the data stored on a chip card changes every time it’s used, the EMV technology is much more secure than the magnetic stripe. It’s estimated that 70 percent of U.S. credit cards will have EMV chips by the end of 2015. To illustrate the importance of becoming EMV-capable, here’s a rundown of different industries and their respective risks of running into payment card fraud.


Dry Cleaning

Since dry cleaners provide a relatively low-cost service, they are not at a great risk of encountering significant payment card fraud. As a recent Chron post² points out, small business owners operating in the laundry field run a greater risk of being robbed than defrauded because the industry is so cash-intensive. However, Bank of America Merchant Services Senior Vice President of Industry Solutions and Platforms, Derrick Carpenter, points out one very good reason dry cleaners should become early EMV adopters: “As consumers get used to doing EMV transactions and understand the benefits of secure chip technology, they will come to expect this from the businesses they transact with. In the end, they could begin to make buying decisions based on which organizations allow them to have the safest transaction.”



On the other hand, jewelers are at great risk of being victimized by payment card fraudsters. Carpenter says, “Merchants that operate businesses that sell high-dollar goods, that are easily sold and turned into cash, are prime targets for people trying to commit counterfeit fraud.” Additionally, an EMV white paper prepared by Bank of America Merchant Services points out, “Because most other major international markets have adopted EMV, criminal rings have taken to using stolen card numbers predominantly in the United States.” Thankfully, jewelers with EMV card readers can help protect themselves from the fraudsters that will — according to SYS-CON Media³ — likely cost the U.S. up to $10 billion this year.


Mobile Food Vending

As purveyors of relatively inexpensive perishable goods, food truck operators are not at a great risk of getting hit by payment card thieves. However, as the industry benefits from the increasing popularity of mobile payment systems, food truckers would be wise to implement systems that are EMV- enabled, as the widespread adoption of technology will leave fraudsters with fewer targets. “Data shows us that fraud does not go away in an EMV environment,” says Carpenter. “Rather it moves to the path of least resistance, and the remaining merchants that do not accept EMV will be a part of the population that could still be targeted.”



According to the Communications Fraud Control Association, communications service providers lost $6.72 billion to identity thieves in 2011 alone. Because of their small size and strong international value, certain wireless products, such as the Apple® iPhone⁴, are highly sought after by criminals. As explained in a recent Forbes article, a depressingly common and lucrative practice is fraudsters using credit mules and counterfeit payment cards to buy subsidized smart phones. As with jewelers, Carpenter warns that mobile device retailers have a high-risk factor for being preyed upon by counterfeiters. “Merchants that sell electronics, jewelry and pre-paid gift cards are typically a likely target for people trying to commit this type of fraud,” he says. “EMV technology is built to stop fraudsters from being able to present counterfeit cards in a merchant’s store.”


Convenience Retail

Like mobile food vending, convenience retail is a cash-intensive industry that deals in the sale of low-cost, mostly perishable goods. Consequently, convenience stores are generally not targets for international crime rings. However, convenience stores that are attached to gas stations are regularly targeted by domestic thieves. The Association for Convenience & Fuel Retailing reported that convenience stores attached to gas stations lost $250 million to credit card fraud in 2013. Pay-at-the-pump gas stations have until 2017 to become EMV-enabled, but as more and more businesses start using EMV tech, some experts believe that incidences of fuel fraud could increase. Accordingly, owners of gas stations with convenience stores should consider upgrading sooner, rather than later.


To learn more about the EMV change and how it affects your business, visit or contact a Bank of America Merchant Services business consultant.

¹EMV is a registered trademark in the U.S. and other countries, and an unregistered trademark elsewhere. EMV® is a registered trademark owned by EMVCo LLC.

²Cron Post:

³SYS-CON Media,

⁴Apple and the iPhone are trademarks of Apple, Inc., registered in the U.S. and other countries

⁵The Association for Convenience & Fuel Retailing,




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