Retailers have an opportunity with the EMV transition
April 08, 2015

Retailers will be required to offer EMV-compliant point-of-sale systems in October, but there may be benefits to adopting new credit card processing technology sooner rather than later. Card issuers are predicted to dramatically increase their rollout of EMV-chip cards throughout 2015, according to Auriemma Consulting Group. Issuers expect to have released EMV cards to 50-60 percent of their customer bases by October.

Without the proper EMV technology, retailers will have to accept liability for fraudulent transactions. Previously, banks and credit card companies were responsible for refunding consumers when their credit or debit card information was compromised. Merchants that haven't updated their point-of-salesystems by Oct. 1 will be liable for the costs of all chargebacks. While many retailers are frustrated by the liability shift, they will not have to pay the costs if they upgrade from traditional magnetic strip card processing.

Although many retailers are concerned with the costs of EMV updates, liability expenses could be far more detrimental to small businesses.

Why EMV could be positive for merchants
EMV provides a higher level of security for consumers and prevents merchants from being exposed to reputational damages. EMV chips generate a code, which can't be duplicated, that is unique to a transaction. Cybercriminals have multiple ways of generating credit card numbers, and without the additional layer of security offered by EMV chips, they can use the account information without having the physical card present. In addition, EMV terminals protect merchants from major cyberattacks.

Customers are increasingly concerned about securing their payment information, especially in the wake of high-profile data breaches at many major retailers. Small companies that offer EMV POS technology can make consumers feel more secure and thus, more likely to continue shopping, Entrepreneur suggested. Because more consumers have been the victim of credit card fraud or identity theft, retailers that start offering this technology earlier can enhance their reputations. Customers want to shop with stores that take precautions to protect their information. Additionally, card issuers are leading the EMV transition, and consumers may be frustrated if they try to make a purchase and a retailer can't process the transaction with EMV security.

Although small retailers don't have as many resources to make the switch to an EMV-enabled POS system, some card issuers and other companies are offering financial and informational help with the transition, Entrepreneur said.

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