America has an ongoing payments security problem. In March, retail giant Target made headlines when it agreed to pay $10 million to settle a class-action lawsuit because of customer data breaches that occurred in 2013. Credit card fraud has increased 40 percent between 2004 and 2010, and if you (or your customers) have ever fallen victim to identity theft, you’ll understand what a huge problem this is.
October 2015 will mark a change in how U.S. retailers take payments. The switchover to EMV—also known as chip-and-pin or chip-and-sign—will help improve the security of credit card transactions.
Pet supplies retailers will be affected by this switchover. Here’s everything you need to know about EMV and how to make the transition from swipe-and-sign to chip transactions:
What is EMV?
EMV (Euromoney, MasterCard, Visa, the three card brands that form the group) is a new standard for integrated circuit chip credit cards and compatible payment terminals and automated teller machines. Soon, credit cards in the U.S. must be inserted into a terminal rather than being swiped. The embedded chip in the card will then communicate with the payment terminal in order to authorize the transaction.
For consumers, issuers like Citibank and American Express are currently rolling out chip cards. For retailers, the switch to EMV will likely require replacing hardware and ensuring that your point-of-sale system can work with the new EMV requirements.
What if I Don’t Switch to the EMV System?
If your payment technology and processing systems are not updated by Oct. 1, your business will be held responsible for any fraudulent purchases. That means you’ll be required to cover all fraudulent activity out-of-pocket if the fraud originates on a chip-enabled card in your pet shop. In other words, if you can’t accept chip cards this fall, any fraud associated with a swipe-and-sign transaction will be your problem.
What Will This Cost?
Adapting to the new EMV standards will mean investing in payment terminals that can read and process the new cards. While there are costs associated with updating your hardware, just imagine how much one fraudulent transaction could cost you—any goods that walk out the door due to credit card fraud will come out of your bottom line.
What Else Should I Know About EMV?
While it might take some effort adapting to a new system, the benefits of this new security are enough to make anyone’s tail wag. EMV technology makes it very difficult to counterfeit a card. In the U.K., credit card fraud declined 80 percent when EMV was deployed. The EMV standard protects both businesses and consumers alike, and most other countries have been using this system for some time—so, welcome to the future.
When investing in your new point-of-sale, make sure it has been recently updated with EMV capabilities, as well as mobile functions, inventory management and cloud-based data storage. This provides an optimal investment ensuring the success of your retail store.
How Do I Upgrade to EMV?
Contact your payments company as soon as possible to ask if and when they will be EMV compliant. You will need to purchase or rent a new payment terminal and be prepared for the cost to most likely be higher than your current solution. At Lightspeed, we’ve been working with our payments partner for many months to ensure that all our products are ready for the Oct. 1 deadline. For a free downloadable guide to answer all of your questions about EMV, visit lightspeedpos.com/emv.
We can’t stress enough that the switch to EMV is a great thing for retailers. Let’s put a stop to credit card fraud.