The EMV liability shift is here. Yet many merchants are still on the fence about whether to take the steps necessary to achieve EMV compliance.
While upgrading payment technology to machines that meet EMV compliance standards and accept chip and pin credit cards does take time and money, the risks of non-compliance are too great to ignore.
If your business still hasn’t decided to become compliant, here are four reasons why EMV compliance is more important than you think.
#1. Not Complying With EMV Exposes Your Business To Financial Risk
Under the terms of the EMV liability shift, credit card brands have transferred the financial consequences of fraudulent transactions to card-issuing banks and merchants. Merchants that have not achieved EMV compliance are now responsible for all fraud charge-backs that occur at their businesses.
While businesses may be able to absorb the costs of one or two small fraud-related charge-backs, eventually the costs could become significant. Even one large charge-back may financially devastate a business.
#2. EMV Compliance Improves Fraud Prevention
Due to the superior technological capabilities of microprocessor chips compared to magnetic stripes, EMV is actually quite effective at preventing credit card fraud. “In the U.K., counterfeit fraud has fallen 56% since the country rolled out EMV cards in 2005”, an article on CreditCards.com reports.
In light of the recent data breaches at Target and Home Depot, customers are more concerned than ever about their personal payment data. By becoming EMV compliant, you show that your business is committed to protecting that data and preventing fraud.
#3. Chip And Pin Credit Cards Are The New Standard
By the end of 2015 it’s expected that 70% of U.S. credit cards issued will be EMV-compliant chip and pin cards. While these cards will continue to work with swipe machines for now, that could change. Additionally, customers who become accustomed to inserting their chip and pin credit cards into a terminal slot may feel that merchants who still swipe cards are not concerned with fraud prevention. This could cause customers to seek out retailers with up-to-date payment technology.
#4. EMV Non-Compliance Makes You A Target
As more merchants achieve EMV compliance by acquiring payment technology compatible with chip and pin credit cards, EMV non-compliant merchants are going to becoming a bigger target for data thieves.
Merchants that have not acquired chip and pin credit card payment technology could see an increase in charge-backs due to fraud. And, as mentioned above, they are going to be financially liable for those transactions.
If your business still has not achieved EMV compliance, you are putting your profits at risk. Contact your merchant services or payment processing provider today to start taking the steps necessary to protect your bottom line.