The US EMV liability shift has arrived. From 1st October 2015, if you’re a US retailer taking card present payments but haven’t upgraded your POS to EMV, you now face taking the hit from chargebacks resulting from counterfeit transactions involving a chip or smart card.
Card issuers are ahead of the curve – by the end of 2015, 50% of cards will bear the chip that puts the fraudsters on the back foot. Processors have upgraded their tech to make sure their systems can handle the additional data transfer. And many of the big retailers have already rolled out their EMV POS systems, giving fraudsters cause to look elsewhere…
This leaves businesses vulnerable. Not just to chargebacks and associated admin costs - fraud costs the US a staggering $9-10 billion a year and accounts for nearly half of global fraud - but to losing customer trust.
The good news is that upgrading to EMV doesn’t have to be a high cost headache, and a proactive approach to upgrading your POS systems can lead to tangible business benefits, including increased revenue and reduced costs.
Read on to find out what you need to do to make sure your business survives and thrives in the EMV age.
- Get up to speed! Knowledge is power. Do your research, talk to your Merchant Service Provider (MSP), and to other retailers who have already upgraded.
- Now slow down… You need to take the time to properly assess your current business needs – both operationally and strategically, to make future proofed decisions.
Who are your customers and what do they want from the POS environment? What’s your budget? Have you done a full audit of your existing system? Are you looking to replace your POS system or do you simply need to upgrade some software or hardware? How can you use chip card technology to build revenue and customer loyalty through incentive and loyalty schemes, special offers and data collection? What card verification methods are best for your business: pin, signature or none?
- You are not alone… Who are you going to partner with? Enlist the help of your existing MSP. Talk to your acquirer/processor and with any third party POS software provider – what changes have they made that will impact on you? Shop around and compare prices and contract terms. Weigh up the benefits of paying for a ‘one stop shop’ versus being your own project manager.
- Quick and easy... The cheapest and simplest way for retailers to upgrade is to add an EMV compatible card reader and PIN pad, together with a basic software upgrade. With prices for card readers starting at around $200, and plenty of low cost and free trial software options, this is a good option for those whose main concern is to mitigate theliability shift. If you go down this route you’ll need to check with your acquirer/processor to check that your proposed solution will integrate with their systems.
- Opportunity knocks… if your customers are young and tech savvy, or your business is fast-paced or high growth, you’ll want to look at adding NFC (Near Field Communication) capability to your upgrade so you can take contactless and mobile payments, including Apple Pay. This may also be a good call if your sales environment is low value/high volume.
- To P2PE or not to P2PE? With point-to-point encryption (P2PE) customer and card data is fully encrypted while it’s in your hands, removing liability for data loss and substantially reducing compliance requirements. However, achieving a P2PE solution can be costly so make sure the benefits will outweigh the costs for your business.
- Protect your investment... Make sure your EMV compliant fixed POS terminals are protected from criminal activity and physical harm, and that your POS is looking its best by using a mounting solution like Tailwind’s FlexiPole system. EMV, though more secure than magstripe, is not infallible, and you still need to protect your equipment from theft, tampering and skimming; as well as knocks, falls and spills.
- Decision time! Once you’ve found the right solution for your business, draw up a detailed project plan and make sure it’s bullet proof. Your solution should be robust and do what you need it to – head off any nasty surprises ahead of implementation.
- People first… Staff and customers adapt fast to EMV, but don’t forget to factor in training time and resources so that your staff can help customers with the new procedures, answer questions about security benefits, and deal with complaints with confidence.
- Implement, test, snag, repeat… If you’ve got more than one store/outlet – pilot your tech in one store before you roll it out and make sure it does the job before you make the big investment.
So, if you don’t want to be one of the 40% of retailers to see 2016 sail in without an EMV migration plan in place or to be a target for criminals looking for vulnerable businesses, time to get started!