Although the arrival of credit cards featuring the new(ish) Europay, MasterCard and Visa technology (aka EMV) has been in the news since last year, many small to midsize businesses (SMBs) haven’t made plans to upgrade their POS systems. Late last year, a survey from Software Advice revealed that 26 percent of respondents didn’t know what an EMV terminal was, and another two-thirds of those SMBs felt their businesses wouldn’t be able to upgrade POS terminals in time to accept the EMV cards in October of 2015, when the liability shift element of the move to EMV will be applied to merchants using non-compliant devices.
EMV as a technology has been used in Europe since the early 1990s and has drastically cut credit card fraud in those countries that have adopted the technology. EMV consists of a card with a smart-chip embedded into it. At an EMV-equipped terminal, the customer inserts the card and may or may not be required to enter a PIN to complete the transaction. The merchant never has to touch the card, which provides added security for both sides.
Vertical Systems Reseller developed its own list of myths that SMBs might believe about the coming EMV technology. Its list included that like other technologies that have been promised and then faded, such as NFC, EMV isn’t really going to become a standard. This isn’t true, however, because it found that 86 percent of financial institutions have plans to issue cards with EMV embedded by 2016, and by the end of 2015, 70 percent of U.S. credit cards and 40 percent of U.S. debit cards will be EMV enabled.
Another myth VSR debunked was that upgrading to the new technology will be too expensive. But even for small businesses, the new Square EMV reader will cost $29 in the pre-sale and $39 for one that plugs into the Square Stand. Not to mention, using EMV technology will lessen merchants’ liability for credit card fraud and data breaches, which can amount to a huge cost for even a small business.
Last fall, Square announced its intent to help SMBs move toward card compliance with this new mobile POS device that accepts EMV. And in early 2015, both American Express and Visa have both announced campaigns to help educate and integrate SMBs into the new EMV technology. American Express is providing a $10 million program in the U.S. to help SMBs adopt EMV within their establishments. Visa has opted to take the word about EMV info on the road with a 20-city educational tour for small businesses and consumers called the Small Business Chip Education Tour, which will feature payments experts and merchants giving speeches about their migration and usage experiences.
With all the plans for education and assistance, SMBs should no longer have a reason to sit back and ignore the push toward EMV. In the end, it will help small business merchants and the U.S. lessen the outrageous amount of credit card fraud that affects us all.