Three Reasons You Will Be Switching to EMV and/or Apple Pay This Year

In your planning for a booming 2015, make sure you include a time and money expenditure for converting to EMV (abbreviation for Europay, MasterCard, Visa) by the end of September. Apple Pay is Apple’s implementation of cardless-EMV plus payment tokenization for iPhones and the revolutionary Apple Watch.

When the calendar turns over to October, 2015, the major credit card companies will shift their liability to you, the retailer, for credit card fraud unless you have installed EMV technology in your store. EMV’s big push has been and will continue delivering chip-enabled new credit and debit cards to your customers. With the EMV launch, every customer will enter a PIN for purchase transactions, an additional security step meant to stifle credit/debit card fraud. This is a very big deal and way past due here in the United States. The PIN adds an extra level of security that protects you and your customers. The chip itself adds more advanced encryption to every transaction, also protecting your business and your customer’s payment data.

Of course, changes like this are not free, although the conversion to EMV-compliant point-of-sale (POS) systems won’t gouge your profits heavily. EMV-equipped terminals range from $100 to $500, on average, depending on whether you’re purchasing or leasing the equipment. A typical retailer may need a few of these and a typical sit-down restaurant may need a handful of portable POS devices so servers can take payment at the table. It’s a natural time to combine the switch to EMV acceptance to protect your business with a conversion to portable device transactions for greater customer convenience.

The reasoning behind the switch (finally) to EMV is to move the burden of investigating and charging back bad debts incurred from financial institutions onto the merchants. EMV is working smoothly in virtually every other country in the world so it’s time for the US to jump on board. It will then be the retailer’s headache to track down fraudulent transactions and pursue cardholders to get their money back. However, with all this responsibility moving stealthily to the merchant, there are some big benefits in store (pun intended).

1. Chargebacks will be lowered.

Yes, since the fees assessed for handling transactions won’t be eliminated, finance companies stand to make more profit. The good news is so will you. Currently, when a fraudulent transaction occurs, the credit card company generally charges the sale back to your merchant account. In today’s reality, you just gave away your product or service to that thief involuntarily. The experience of countries using EMV has shown a dramatic reduction in fraudulent charges so there is great hope stateside to see the same reduction. The bottom line: with EMV, your exposure to fraud drops and your profits rise.

2. Customers expect it.

Any consumer whose credit or debit cards have been compromised is sensitized to the need for greater credit and debit card security. Not only the initial theft but also the months of phone calls, arguments, low credit scores and fighting with bureaucracy to get restored is a nightmare. If your business is not EMV compliant, red flags pop up among customers, concerned about your security practices and questioning your business ethics. If everything is equal and your competitor is EMV ready and your business isn’t, they are likely to go to that competitor. Your customers expect your compliance to protect them.

3. You stay in business.

Times change and your business must change with it to remain relevant and profitable. This is just a cost of doing business. If you don’t switch to EMV, your PCI compliance is at stake, your security risks increase and you fall behind – the perception of your customers will suffer and not maintaining your technology with your competitive leaves you vulnerable. Not converting will cost you short-term profitability and long-term future with your business.

The move to EMV in the United States is long overdue. However, it is a reasonable approach to thwarting credit and debit card fraud in card-present transactions. No one likes change but this is a change that must occur to better protect your business as well as your customers’ data. Jump on board.