October 1 marks a big change in the way many retailers in America will do business. But according to recent reports, many small-business owners don’t even know it’s happening.
Debit- and credit-card providers are in the process of distributing new EMV, or chip card technology, enabled cards to their customers. (The last of these cards are expected to be received by October 2015.) These new cards have square chips embedded in them that are more secure than traditional magnetic-stripe cards, in an attempt to curb America’s rising issue with credit card fraud and retail data breaches. (While information stolen from a magnetic-stripe card can be duplicated, an EMV card produces a different code for each transaction that can only be used once.)
Businesses large and small must replace their old swipe-and-sign readers with ones that can read EMV-enabled cards to accommodate this new technology. The October 1, 2015, EMV deadline also marks a change in liability between credit card insurers and retailers.
“Although this deadline is not compulsory, if a merchant has failed to upgrade their technology to be EMV-compatible and a fraudulent transaction occurs, they will be held financially responsible,” says Jeremy Gumbley, CTO of Creditcall, a payment service provider. “In addition to being liable in the event of a fraudulent transaction, businesses that neglect to be EMV compatible run the risk of damaging their company reputation and facing fines issued by card brands.”
With this amount of risk, small-business owners should be especially invested in gearing up for a new EMV world. Yet it appears many are in the dark, according to data provided by Manta, a provider of growth solutions for small-business owners. In a survey of 1,609 business owners asked if they planned to adopt the new technology, 28 percent of those who accepted cards answered that they didn’t know about EMV or why they had to change their process.
Not knowing about EMV won’t be an excuse small-business owners can use come October 1, however. It’s important to start doing the research into purchasing and implementing the new technology now, before it’s too late.
The first thing most small-business owners may wonder is, “How much is this going to cost me?” It depends on the complexity of the reader—for those who just want one to read the new cards, the cost can start at around $100. But for those looking for a more robust offering—point-of-sale, barcode reader, clock-in platform, etc.—that can set you back into the high hundreds to low thousands per station. (Not including the cost of having an IT professional install the device for you if you’re not particularly tech savvy.)
“I would definitely evaluate [your] processes to see if perhaps the more expensive equipment like the Clover, [for example], would be a benefit to [your] business,” advises Tammy Miller, director of human resources at Swan Cleaners, a local dry-cleaning company based in Columbus, Ohio. (Her company paid $249/EMV pin pad for its 24 locations around the city.) “I don’t see it as a benefit for us, but for a small-business owner who may be using a regular cash register, the Clover takes the place of that. It may be better to spend that kind of money, especially if it’s a one-time purchase.”
There are resources available to make the EMV migration less time-consuming and costly. Make use of resources like banks and the current provider of your current credit card reader. “Banks will provide very small businesses with a new chip enabled terminal, making the migration to EMV incredibly smooth,” advises Gumbley. “Larger businesses should purchase an integrated software from a vendor that will include the EMV payment option. They can also turn to their [independent software vendor] or [value-added reseller], who can help ease the migration process by saving time, money and resources.”
First Data, the company that provided Swan Cleaner with its old mag-stripe reader, was persistent when trying to get Miller and her team to switch to EMV. They finally sat down and evaluated their options, and found one that made the most sense for their tech needs.
More Than Meets the Eye
But it doesn’t end at just purchasing and installing the new technology.
“Businesses, large or small, should understand that migrating to EMV is both complex and time-consuming,” says Gumbley of Creditcall. “However there are a range of industry resources available to assist in your migration—you are not alone! Check out the Smart Card Alliance’s EMV Migration Forum, an independent cross-industry body in the payments space aimed to successfully introduce secure EMV contact and contactless technology in the U.S. From webinars to white papers to FAQs, the EMV Migration Forum is your one-stop-shop for EMV knowledge.”
There’s also the matter of training yourself and your staff about how to use the new technology, and prepare your customers for the change from quickly swiping to waiting a few moments after dipping their card in a reader for approval.
“We have a great computer system, [but] we have a separate [EMV] terminal so you can get mistakes made by your clerk,” says Miller. “Perhaps they were supposed to ring up a sale for $20.02 and then they go to the terminal and ring it up for $2.02, you’ve lost $18.” Miller says she and another member of her team will work on training the staff and creating training documentation that aligns with their company and industry beyond the provided literature, something small-business owners may consider doing as well.
While the EMV migration isn’t expected to happen overnight, now is as good a time as any to take serious steps in ensuring your company and your customers’ security.
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