Ask the Expert: Are You Ready For the EMV Revolution?

Brendan Hickey, Solupay Processing Solutions | COSE Expert |

What is EMV?

EMV is a form of contactless payment and is now the global standard for inter-operation of integrated circuit cards, or “chip cards.”  You might also hear EMV referred to as “chip cards,” “chip and PIN,” and “chip and signature.”

The term EMV comes from the developers of this technology – Europay, Mastercard, and Visa. Some credit/debit cards already use this technology in the U.S., while other regions of the world such as Europe, China and Canada have been using it for years. EMV uses a small microprocessor that’s embedded into a credit or debit card. Banks and credit card companies want you to use them because they’re more secure than magnetic strip cards.  

How will EMV affect my business?

Most cards in the U.S. today do not have this embedded chip. Some cards have a magnetic strip and chip, but eventually magnetic strips will go away entirely. The reason EMV is receiving so much attention is starting in October 2015, all major credit card companies — Visa, MasterCard, Discover, and American Express — have said that if EMV capability has not been implemented on your POS terminals, the merchant will be liable for all counterfeit transactions made.

This chargeback liability shift will not have a huge impact on merchants that have a low incidence of chargebacks today. But for merchants who are fraud targets or sell high ticket items that can be easily resold on the streets, the shift will have a much greater impact.

If you are a Card Present environment where you are face-to-face with your customers and are swiping credit cards within a point-of-sale or terminal, or, if you accept payments both face-to-face and over the phone or Internet, the chargeback liability pertains directly to you and is vital that you begin to talk with your credit card processors and vendors now to be ready for the October changeover.  (Note: This does not mean you must be set up to accept chip payments by October 2015. There is no law or statute that will put you out of PCI compliance by not being EMV compliant.)

If you are a Card Not Present environment where you only accept credit card payments over the phone or Internet, you do not need to worry too much about EMV, but you will want to be aware of the changes and how they could impact your business in the case of fraud in the future. 

How can I ensure I am EMV compliant?

EMV compliance is fairly complex, but here are four quick tips to make sure you stay compliant with the liability shift: 

  • Start early – like now. Buy devices and systems you can scale over time. 
  • Communicate with your staff so they understand the change process to ensure a smooth transition.
  • Make a list of potential suppliers, identify the questions to ask them, and choose the one that best meets your needs.  Working closely with a payment solutions provider can ensure you are up to date on any changes.
  • Create a budget – Expense will be driven by options. Choose a provider that has more than one EMV solution.

Even though there is no legal obligation to comply with this shift, it’s still wise to do so. Your company might be able to sustain the new losses because of your increased liability—for a while. But at some point, not upgrading your EMV compliance will cost you more than upgrading. 

BRENDAN HICKEY is director of Business to Business Solutions for Solupay Processing Solutions in Twinsburg.

Want more expert advice? Check out COSE Expert Network, an online forum connecting business owners with creative solutions to the tough questions they face every day. 

This article originally appeared in the July 27, 2015, edition of Small Business Matters.