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

If you’ve ever been the victim of credit card fraud, then you already know the hassle of working to reverse all the charges. Would-be thieves are getting smarter and smarter as they learn different ways to hack into credit cards and even duplicate the card using fake magnetic stripes. However, the newest technology to fight credit card theft is here. It’s called EMV, which stands for EuroPay, MasterCard® and Visa®. It’s a new standard for cards that enhances security in processing payments. All small business owners need to understand EMV technology and the new liability shift, which went into effect October 1, 2015.


Why EMV?

EMV cards are more secure than traditional credit cards because they store customer data on an embedded smart chip. When inserted into an EMV reader, a chip card generates a unique encrypted transaction code every time the card is used, so it cannot be duplicated. EMV technology is much more secure than the magnetic stripe cards, which are easy to counterfeit, and anyone who copies a stripe is able to use your card over and over again.

“EMV originated as collaboration among EuroPay (later purchased by MasterCard), MasterCard and Visa and was implemented in Europe in the 1990s. “By some estimates, almost half of all payment cards issued outside the United States have an EMV chip,” states Bank of America Merchant Services in a recent white paper. “Although the chip virtually ensures that the card has not been counterfeited, issuers can add additional security by requiring cardholders to enter a PIN for each purchase instead of the current standard of signing a receipt.”


How Will EMV Impact Your Business?

As of October 1, 2015 merchants who have not adopted EMV technology will be liable for counterfeit fraud losses when a chip card is used. “What this means is, if your business processes a fraudulent payment transaction because you didn’t use EMV, then you as a business owner are liable for the costs associated with that fraud,” says Bank of America Merchant Services Senior Vice President of Product Delivery, Jonathan Sepulveda. “Whereas, if you are EMV enabled, then the credit card issuer is liable for that fraudulent activity. So businesses can choose to disregard this, but then they are assuming some liability for possible fraud activity that could be conducted. In fact, magnetic cards are far easier to duplicate, whereas chip cards are essentially impossible to duplicate.”

With all of this in mind, this does mean that it may end up costing some businesses as little as $0 to upwards of $500, to upgrade for EMV acceptance, depending on what point of sale system or payment device you currently use. If you’re a user of one of the many full scale point of sale systems, Sepulveda warns that those are often slower to incorporate changes like this, so be sure to check with your provider. Most upgrades for basic payment terminals can be as simple as a software update, whereas others may need to be replaced entirely if they don’t currently have a chip card slot. The important thing is that you do your research and find out what upgrades your system will need, so your business will not be held liable. “Plus it’s a good way to show your customers how much you value their security,” offers Sepulveda. “By ensuring the latest in security technology, you’re ensuring your customers are your priority.”


To learn more about the EMV change and how it affects your business, 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.



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