October 1, 2015: Is Your Business Ready?
By Tom Cleary, Vice President Chebanse Facility
Ready or not, October 1st will be here before you know it. And this year that date will mean more than just chilly weather, colorful leaves, and football games; it will be the date that the EMV card becomes the standard for security in merchant processing. If you have no idea what that means, please allow me to explain.
An EMV card is a credit card equipped with a computer chip which provides additional security. With this chip, each transaction is given a unique number identifier. This feature makes it more difficult for the card to be fraudulently duplicated, thus stopping a common type of credit card fraud.
The EMV cards (also called smart cards or chip cards) look much like an ordinary credit card and are used in the same way. However, new processing equipment can read the chip in these cards instead of the magnetic strip, making transactions more secure.
So what does this have to do with October 1st? For small business owners, this is the date by which all businesses that accept payments via credit cards are expected to have the necessary equipment to read the EMV chips. While no one will come around and check to see that you have the updated technology in place, there is a compelling reason to make that switch sooner rather than later. After October 1, 2015, merchants who do not choose to switch to the new EMV technology will assume the liability for fraud occurring on transactions processed with an old-technology card reader. The credit card company or card issuer will retain liability for transactions that occur at merchants that have made the switch to new EMV readers.
Because this shift of liability could have disastrous consequences for a small business if fraud does occur, every business should carefully consider when they will update their card readers. The cost of the update is usually $200 to $600 for each individual reader as well as the cost of modifying how your point of sale (POS) software operates and training your workers to use the new technology.
Though these changes carry with them some expense and irritation, you will probably be glad once you have made the change. Not only does updating protect your business from fraud liability; it also makes it harder for hackers to commit fraud in the first place. Besides, these cards are not going anywhere. This is the future so you might as well join in!
Federated Bank offers user-friendly merchant processing services with competitive rates and the most current technology available. Our business experts can conduct a free analysis to determine if you could be saving money by switching your merchant service provider. Please contact us if we can be of any help to you in this area.
