FAQ: EMV Terminals & Chip Cards

EMV FAQs

  • What is EMV?
  • Why do I need to switch to an EMV terminal?
  • Do I really have to switch my equipment to be EMV capable?
  • Does my EMV machine need to be have NFC (near field communication) capabilities?
  • How expensive is this transition for my business?
  • What are the benefits of having a terminal that takes EMV chip cards?
  • What will happen to my business if I do not make the switch?

 

What is EMV?

In short: EMV refers to the safer way to pay: EMV microchip credit cards for consumers and chip capable point-of-sale systems for business owners. Many other countries have been utilizing EMV technology and seen a drastic improvement in credit card safety. EMV Microchip Card

EMV stands for Europay, MasterCard and Visa. It’s a worldwide payment standard that features micro-chipped credit cards and point-of-sale machines that are able to accept them. The standard helps to cut fraud in face-to-face transactions because a dip of a chip card creates unique, dynamic data that is difficult to duplicate, unlike the classic magnetic stripe cards that transmit static data. Currently, card-not-present transactions do not benefit from EMV technology, but it is believed that EMV will be able to safeguard online and telephone purchases in the future.

Many other countries have had EMV as a payment standard for years and have seen a reduction of fraud. According to a 2012 Retail Payments Risk Forum Working Paper, domestic fraud losses in the UK was reduced by 34% since their 2004 implementation. In France, the losses due to fraud dropped over 35% between 2004 and 2009.


Why do I need to switch to an EMV terminal?

In short: It’s a mandate issued by credit card companies, and it could safeguard your business.

In hopes of decreasing stolen credit card information, credit card companies have set a mandate for all merchants to be EMV capable by October of this year or be liable for any fraud that occurs. The new credit cards have an embedded microchip that creates unique transactions, which makes duplicating activity and stealing cardholders’ sensitive information more difficult. If that doesn’t convince you as a merchant, losing business will. Customers who wish to feel safer will phase out their magnetic stripe cards for EMV chip cards, making magnetic stripe exclusive terminals incompatible with their plastic. An EMV terminal features a slot for EMV cards as well as a slot for the classic cards.


 Do I really have to switch my equipment to be EMV capable?

In short: Yes and no.

Technically, merchants won’t be forced by a law to become EMV capable, but they are putting their business at risk if they do not comply. The ‘it won’t happen to me’ mentality is not a wise one to have, as most data breaches happen to smaller businesses. In fact, 80% of all breaches happen to small businesses that process $10,000 a month or less!


Does my EMV machine need to be have NFC (near field communication) capabilities?

In short: No.

Near field communication is the technology that allows devices (usually smartphones) to send and receive data with other devices, like a point-of-sale machine. Applications like Apply Pay and Google Wallet use NFC for speedy transactions. Although it’s a handy tool, NFC is definitely not necessary for a business owner to consider, at least currently. 

If you prefer your business to be state-of-the-art in terms of taking payments, there are (more expensive) EMV terminals that come with NFC capabilities. If you don’t want to spring for a whole new terminal, separate NFC readers are also on the market.


 How expensive is this transition for my business?

In short: It depends.

EMV terminals can range from free with a merchant account to over $1000, depending on brands and your business needs. The transition can be expensive, but it doesn’t have to be. A few credit card processors, including Frontline Processing, are giving away EMV capable terminals for their current merchants or any new merchant accounts.


 What are the benefits of having a terminal that takes EMV chip cards?

In short: More business, more money, safety.

The most significant benefit of having an EMV terminal for your store is safety. If your business is the victim of any fraudulent activity, you will not be held liable. In addition, customers who value their safety will be proactive in making the switch as well and updating all their credit cards. By updating your terminal as well, you are offering your products and services to customers with and without EMV chip cards. With this, you are making more money and not turning away business.


 What will happen to my business if I do not make the switch?

In short: Only time will tell.

In a perfect world, you could never experience any data breaches as a business owner, and you might get away with ignoring the EMV mandate. Unfortunately, since most data violations happen to smaller businesses, chances are you would be taking a serious risk if you do not upgrade your equipment. Moreover, you could potentially turn away loyal customers whom have changed out their magnetic stripes for EMV microchips. 

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