EMV Expertise: What Small Retailers Have to Know


Over the previous few years, bank card information breaches at chain shops have uncovered hundreds of shoppers to hackers trying to make a fast revenue off their victims’ info. In an effort to stop such safety violations, retailers have been urged to just accept EMV chip playing cards for the reason that fall of 2015 – or else bear the price of any ensuing fraudulent exercise.  

CreditCards.com stories that this initiative has resulted in 855 million chip playing cards issued to American shoppers, representing 85 % of bank cards and 60 % of debit playing cards issued by the top of July 2017. Although the variety of companies accepting chip-based credit score and debit playing cards continues to develop, some companies, together with many small retailers, are nonetheless hesitant about adopting this expertise. 

That will help you higher perceive the present state of EMV – and what it means for your small business transferring ahead – right here’s an summary of its requirements and skilled recommendation for small enterprise homeowners. 

What’s EMV? 

EMV, which is called after its authentic builders (Europay, MasterCard and Visa), is a world bank card customary that enhances the safety of in-person card transactions. EMV expertise permits delicate cardholder information to be saved in a chip, somewhat than within the magnetic stripe discovered on conventional cost playing cards.      

Since particular person organizations can solely accomplish that a lot to cease cybercriminals, the bank card funds trade instituted EMV insurance policies to combat bank card fraud. The federal government additionally stepped in to steer a nationwide effort to raised shield shoppers. In October 2014, President Obama issued an government order to implement enhanced safety measures for shopper funds. A part of this order, which is detailed in a White House fact sheet, required cost card issuers to embed playing cards with safe EMV microchip expertise by October 2015. 

“The expertise has been round for about 20 years and is utilized in a lot of the world, however the chip-enabled playing cards have solely actually caught on within the U.S. over the previous few years,” stated Mike Blang, senior vice chairman of gross sales and advertising and marketing at Wind River Financial, a service provider account supplier. 

How EMV works 

EMV expertise could be very easy on the client’s finish. As an alternative of swiping the magnetic strip of a bank card, you “dip” one finish of the cardboard into the EMV reader so it may scan the chip. For EMV expertise to work, the point-of-sale (POS) system the place the cardboard is used should be geared up to learn and talk with the microchip. 

At every transaction, the microchip creates a singular code that may’t be used once more. That is very completely different for the standard magnetic stripe card, whose information may be simply copied by an affordable card-reading system and reproduced in counterfeit playing cards. 

EMV playing cards present a further layer of safety by requiring a PIN enter as an alternative of a signature when authenticating purchases, stated Dax Dasilva, founder and CEO of POS system supplier Lightspeed

Understanding the legal responsibility shift 

The most important card issuers, together with MasterCard, Visa, American Specific and Uncover, introduced that retailers and issuers who didn’t assist chip expertise by October 2015 can be held accountable for any counterfeit fraud.  

“Nonetheless, the migration to EMV chip expertise was not a mandate,” stated Blang.  

In consequence, many small companies averted making the transition. In actual fact, in accordance to a latest Manta survey of greater than 2,000 small enterprise homeowners, 56 % of the respondents stated they didn’t settle for EMV chip playing cards.  

“Lots of the enterprise homeowners we work with are unaware of this danger of not accepting EMV,” stated Mark Guagenti, web site expertise coordinator and advertising and marketing assistant for Tidal Commerce, a cost processing firm. Guagenti’s expertise just isn’t distinctive, as demonstrated by the 65 % of Manta respondents who expressed being unfamiliar with the fraud legal responsibility shift for EMV bank cards and the 34 % who didn’t know what EMV expertise is or the way it could impression their enterprise.  


“There are nuances, however the normal concept is that previously, the cardboard issuer held counterfeit fraud legal responsibility,” defined Blang. “After Oct. 1, 2015, the entity that had invested least in chip expertise, whether or not it’s the service provider or the cardboard issuer, holds the fraud legal responsibility going ahead.”   

For instance, if a buyer has a chip card however the service provider doesn’t have a terminal that’s licensed for chip card acceptance, then the price of any fraudulent transaction will be that service provider’s duty.  

“Some retailers didn’t know their degree of counterfeit fraud legal responsibility since, up to now, issuers merely absorbed the loss,” stated Blang.  

Challenges of switching to EMV  

A lack of awareness of the legal responsibility shift is solely one of many causes some retailers have delayed implementation of EMV expertise. Some companies are reluctant to tackle the upfront funding for new {hardware} and software program upgrades.  

“Many enterprise homeowners concern that the associated fee to improve to an EMV terminal is steep,” stated Guagenti. This may be the case particularly for eating places or companies with a number of places, he added.  

Getting the suitable certifications in a well timed trend has been one other problem for enterprise homeowners, even these dedicated to the conversion course of. Along with adopting new software program to allow them to settle for EMV, retailers and their newly EMV-compliant terminals should bear a certification course of.  

“Many software program suppliers underestimated the complexity and time of getting certifications accomplished,” stated Blang. “In some environments utilizing built-in point-of-sale programs, the software program wanted to course of chip transactions was not licensed by the date of the legal responsibility shift.” 

This places retailers within the precarious place of having their new terminals arrange and able to go however nonetheless ready to be licensed, though they’re already being held accountable for any fraud that happens with prospects who have EMV chip playing cards.   

Although it’s a irritating state of affairs, Blang stays optimistic concerning the general impression EMV can have on {the marketplace} and reminds retailers that on daily basis, increasingly more suppliers are being licensed and rolling out EMV to these who need it. In actual fact, the Manta survey stories that 77 % of small enterprise homeowners who’ve moved to EMV expertise stated the transition went easily. 


In accordance with Blang, the U.S. is bigger and extra advanced than every other cost card market on the planet.  

“This, mixed with what was arguably a shorter migration timeframe, could lead one to consider that what was achieved was really nothing wanting transferring mountains,” he stated. 

Perks of EMV 

The advantages of EMV expertise haven’t gone unnoticed. Fraud discount is the most important payoff.  

“The extent of success is subjective, however some trade statistics point out that counterfeit cost card fraud is already down by as much as 40 %,” stated Blang. 

MasterCard reported that fraud decreased by 60 % by way of {dollars} amongst its high 5 EMV-compliant retailers, in accordance with PYMNTS

There are lots of different advantages enterprise homeowners ought to contemplate when upgrading to EMV. In accordance with Guagenti, the new EMV-compliant terminals present infinite add-ons and assist cellular purchases with Apple Pay and Android Pay. Guagenti additionally pointed out that EMV expertise supplies pay-at-table and pay-in-aisle choices, which permit prospects to pay the place they’re, with out their bank card ever leaving their hand.  


“Immediately’s expertise is making it even simpler to combine programs into legacy POS, and stand-alone programs are corresponding to older machines,” stated Guagenti. “Your new machines will present you with a greater buyer expertise and elevated protections.”  

Clients are additionally starting to respect EMV. In accordance with a survey of two,000 U.S. adults by private finance web site NerdWallet, 78 % of respondents stated they like EMV playing cards, with 47 % believing the playing cards make transactions safer, and 48 % concluding it’s their most popular technique to pay on the retailer. 

Accommodating prospects with out EMV playing cards 

Not all cardholders have acquired up to date, EMV-enabled variations of their bank cards. This isn’t one thing retailers have to fret about, so long as they’ve already made the change to EMV expertise.  

“EMV-compatible terminals and machines are additionally arrange to allow them to swipe conventional magnet stripe playing cards,” stated Suneera Madhani, founder and CEO of Fattmerchant, a bank card processing options supplier. “So, if a shopper walks into the enterprise with out an EMV card, they are going to nonetheless be capable to course of the transaction.”  

Nonetheless, the enterprise won’t be accountable for fraud-related losses from these swiped transactions. 

“If a enterprise has carried out the expertise however prospects don’t have a chip card, the legal responsibility burden stays with the banks,” stated Matt Schulz, senior trade analyst at CreditCards.com. “Typically talking, the one case during which the legal responsibility burden shifts is when a bank card holder has a chip card however the service provider doesn’t have the expertise to just accept the chip card.” 

Transferring ahead 

“If a enterprise hasn’t upgraded to EMV expertise … they need to make plans to take action as quickly as attainable,” Schulz suggested. “Whereas it’s undoubtedly costly to make these upgrades, the fact is that the service provider dangers going through far better prices in the event that they find yourself getting caught with the invoice for future bank card losses.” 

“Switching to EMV will imply including new in-store cost expertise and inside payment-processing programs all whereas complying with new legal responsibility guidelines, nevertheless it’s an important funding,” added Dasilva.  

Though EMV expertise is a powerful deterrent to fraudulent exercise, it can not shield shoppers from all information breaches. Card-not-present fraud, which entails purchases made on-line, by cellphone or by way of mail order, is on the rise and can stay an issue for years to come back.  

However no matter what new challenges could also be on the horizon, EMV expertise is already the usual world wide and shaping the way forward for cost processing. 

“EMV just isn’t a expertise development that may fall by the wayside,” Madhani stated. “We’re the final nation to undertake this expertise, and we are going to solely proceed to see the event of EMV and contactless applied sciences.” 

Further reporting by Nicole Fallon and Sara Angeles. Some supply interviews have been performed for a earlier model of this text. 

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