31 Mar Why switching to EMV Chip & PIN is so important
From a merchant perspective, there is a myth that switching over to EMV Chip and PIN is more expensive than swipe and sign.In some cases, if you own terminals that facilitate EMV, software needs to be bought to manage the PIN, but it’s not really more expensive in the long term.If you are renting your terminals, the switchover should be seamless and could even save your company money. For example at Kubera, your bottom line is important to us, which is why we do pricing reviews and analyze your business before recommending a solution moving forward.In both instances, switching from swipe and sign to EMV will reduce your chances and liability for fraud, which in the long run is a cost reducer.EMV is more secure. The cards are much more difficult to replicate, and EVM terminals authorize payment using an encrypted code from the EMV Chip that cannot be used twice. Cardholders then, have to authenticate the transaction themselves using their PIN (personal identification number).Another reason to offer EMV is all 10 of the largest credit card issuing banks are on their way to offering EMV compliant credit and debit cards.A recent study from cardhub.com explains that these 10 credit card issuers expect that the majority of their portfolio will be updated with EMV by the end of 2015. Most of these cards will also have NFC or near field communication. This makes for extremely efficient and fast payment. Customers enjoy the convenience of this feature and they regularly use it here in Canada.In October, there will be a shift of liability for the costs associated with the fraud.Right now, if a card-present transaction is fraudulent using counterfeit cards for example, the liability falls back on the card issuer or payment processor depending on situation.After October 1st 2015, the liability for card-present fraudulent transactions will be on whichever party is the least EMV-compliant. This could be the issuer, the processor or even the business.In many cases the cost of fraud will fall back on the merchant as issuing banks and acquirers are on track to be EMV compliant.Doug Johnson, the vice president of risk management policy for the American Bankers Association expects that about 50% of banks will be transitioned over by October 2015.Even though every bank may not be compliant, there’s no reason to leave your business at risk for fraud. Especially when it’s typically an easy switch, much easier than that of a major bank.