Understanding EMV Chip Technology and Why It’s Important for Your Business

If you’ve used a credit or debit card in the past few years, you’ve probably noticed a small metallic chip embedded on the front of your card. This is part of EMV technology, which stands for Europay, Mastercard, and Visa, the three companies that developed the standard for chip-based payments. EMV chips were designed to replace the magnetic stripe cards that were used for decades because they’re vulnerable to fraud. According to a report by EMVCo, 58.9% of card-present transactions globally were EMV-enabled as of December 2019. In the US, EMV adoption has been slower but still reached 63.4% of card-present transactions as of June 2020. EMV chip technology offers many benefits for both consumers and merchants, such as enhanced security, reduced fraud, and global compatibility. In this blog post, we will explain what EMV chip technology is and why it is important for your business.

The EMV Liability Shift:

One very important reason to adopt EMV chip technology is the EMV liability shift that took place in October 2015. This was a major change in the payment industry that transferred the responsibility for fraudulent card-present transactions from card issuers to merchants who don’t have EMV-enabled terminals. This means that if a customer uses a counterfeit or stolen EMV chip card at your store and you do not have an EMV terminal, you will be liable for the full amount of the transaction, plus any fees and penalties. According to a study by Javelin Strategy & Research, counterfeit card fraud losses in the US declined by 76% from 2015 to 2019, thanks to EMV adoption. However, merchants who haven’t upgraded to EMV terminals face significant risks of fraud and chargebacks. Therefore, it’s essential for your business to accept EMV chip cards to avoid these consequences and protect your customers’ data.

How to Accept EMV Chip Cards:

To accept EMV chip cards at your POS, you’ll need to upgrade your payment terminal and software to be EMV-compatible. There are different types of EMV terminals and readers available in the market, depending on your business needs and preferences. Some of the most common options are:

• Countertop terminals: These are standalone devices that can be placed on a counter or desk. They usually have a keypad, a screen, and a slot for inserting EMV chip cards. Some countertop terminals also have a magnetic stripe reader and a contactless reader for other payment methods. Countertop terminals are easy and secure but require a wired connection to a power source and a network.
• Mobile readers: These small devices can be attached to a smartphone or tablet via Bluetooth or an audio jack. They allow you to accept EMV chip cards anywhere with a wireless connection. Mobile readers are convenient and flexible, but they may have lower battery life and depend on the performance of your mobile device.
• Contactless readers: These are devices that can accept payments by tapping or waving an EMV chip card, a mobile wallet, or a wearable device near the reader. They use NFC (near-field communication) technology to communicate with the payment device. Contactless readers are fast and convenient, but they may not be compatible with all EMV chip cards or mobile wallets.

Each type of EMV terminal and reader has its own features and benefits that can suit different types of businesses. For example, if you have a mobile business, you may prefer a small mobile reader that works on any device. If your business is large, you may prefer a countertop terminal that handles high-volume transactions and offers more security features. If you want the best customer experience, you may prefer a contactless reader that enables quick and easy payments with minimal contact.

How to Educate Your Customers and Employees:

Once you’ve upgraded your terminal to accept EMV chip cards, you’ll need to educate your customers and employees about how to use the technology. This will help you avoid confusion, frustration, and errors during transactions. Here are some tips and best practices for educating your customers and employees about EMV chip technology:

• Display signage and stickers at your store that indicates that you accept EMV chip cards. This will inform your customers that they can use their EMV chip cards at your store.
• Offer guidance and assistance to your customers during transactions. For example, you can explain to them how to insert or tap their EMV chip card, how long to wait for the transaction to complete, and when to remove their card. You can also answer any questions or concerns they may have about EMV chip technology, such as why it is more secure, how it works, and what to do if their card is declined.
• Train your employees on how to use EMV terminals and readers. For example, you can show them how to set up the terminal, process payments, troubleshoot common issues, and handle customer inquiries. You can also provide them with manuals, videos, or online courses that they can refer to anytime.
• Emphasize the advantages of EMV chip technology for your customers. For example, you can tell them that EMV chip technology protects them from identity theft, reduces chargebacks, and allows them to use their card anywhere in the world.

How to Leverage EMV Chip Technology for Your Business:

Besides enhancing the security and efficiency of your transactions, EMV chip technology can help your business grow and increase revenue. Here are some ways you can leverage EMV chip technology for your business:

• Collect valuable data and insights on your customers’ preferences, behavior, and spending patterns. You can use EMV chip technology to capture and analyze data from each transaction, such as the amount, time, location, and type of payment. You can use this information to tailor your marketing strategies, products, and services to your customers. For example, you can use EMV chip data to segment your customers based on their purchase history, frequency, and value. You can then send them personalized offers, recommendations, and feedback that can increase their satisfaction and loyalty.

How to Prepare for the Future of Payments:

EMV chip technology is not only the present but also the future of payments. As technology evolves, EMV chip technology will enable new and innovative ways of paying and being paid. Here are some of the emerging trends and innovations in the payments industry that are driven by EMV chip technology:

• Mobile wallets: These applications allow users to store and use their payment cards and other information on their mobile devices. They use NFC (near-field communication) technology to communicate with EMV terminals and readers. Mobile wallets offer convenience, security, and functionality for both consumers and merchants. For example, consumers can use mobile wallets to pay with their fingerprint, face, or voice. Merchants can use mobile wallets to send and receive payments, offer rewards and discounts, and collect customer data.
• Biometric authentication: This method verifies the identity of a user based on their physical/behavioral characteristics, such as fingerprint, voice, or face. Biometric authentication can enhance the security and convenience of EMV chip transactions by eliminating the need for PINs, passwords, or signatures. For example, consumers can use biometric authentication to authorize EMV chip transactions with their fingerprint or face.
• Tokenization: This is a process of replacing sensitive data, like card numbers, with non-sensitive data, like random numbers or symbols. Tokenization can protect EMV chip data from fraud and theft by making it useless for hackers or criminals. For example, consumers can use tokenization to generate one-time codes or tokens for each EMV chip transaction. Merchants can use tokenization to store and transmit EMV chip data without exposing the actual card numbers.

In conclusion, EMV chip technology is important for your business because it can improve the security, efficiency, and profitability of your transactions. Adopting EMV chip technology allows you to protect your business from fraud and chargebacks, offer a better customer experience, and leverage new innovations. If you’re ready to take the next step in adopting EMV chip technology for your business, we’re here to help. Contact us for a free consultation and find out how we’ll provide you with the best EMV solutions. Visit our website for more information and sign with no contracts or cancellation fees. Don’t miss this chance to upgrade your business and keep your technology up to date with EMV chip technology.