In the past few years, data breaches and transaction fraud on credit card payments have increased significantly. They have left thousands of digital customers vulnerable to hackers and malicious third parties who can misuse this data. To minimise the chances of fraud attacks and mitigate any damage, merchants and vendors are quickly adopting EMV chip cards. Since 2015, EMV cards have been the most secure option for digital transactions and failure to accept EMV transaction payments can leave merchants open to hacking attempts.
According to CreditCards.com, introducing EMV payment processing has seen 855 million cards being issued in the US alone, which represents 60% of debit and 85% of all credit cards issued as of July 2017. While EMV card payments have seen exponential growth in adoption rates over the last five years, there are several merchants, including many new businesses, that are still hesitant when it comes to EMV adoption.
What is EMV Technology?
Europay, MasterCard and Visa created a global standard for credit card security that enhances in-person transaction security. It encrypts and stores sensitive customer data in a chip instead of the magnetic stripe that traditional cards use.
EMV Payment Processing Shifts Liability:
According to the new EMV standard, leading issuers like American Express, Discover, MasterCard and Visa have announced that issuers and merchants who don’t support chip technology as of October 2015 are liable for compensation in case card or data fraud occurs.
According to a survey by Manta, 56% of over 2000 small business owners didn’t accept EMV card payments even after the date had passed. This was due to a lack of awareness from merchants who did not want the added expense of upgrading their payment terminals. Earlier, the liability was on the card issuer, which meant damages from any fraudulent transactions would be compensated by the issuing company. But now, the liability falls on whichever party has invested least in the current chip technology. This could be either the card-issuing company or the merchant.
Benefits of Choosing EMV Payment Processing:
1. EMV provenly reduces fraud-related losses:
Data from leading finance research and card issuing companies have shown that EMV cards effectively reduce in-store data fraud. Chip cards protect customers, merchants and businesses by creating highly-secure payment ecosystems. According to data shared in Visa reports, card-present fraud transactions and payments in the US have reduced by 80%. A similar pattern was observed in Europe and Canada where the standard was implemented before reaching the US.
2. EMV technology is more advanced than conventional magnetic stripe technology:
In EMV-enabled cards, a smart chip is integrated into the payment card. The corresponding payment acceptance technology is fitted within the POS terminals accepting debit and credit card payments. The EMV chip contains a series of secure keys generating cryptographic and dynamic data in every transaction. The chip encrypts the one-time codes for the transit journey which makes it almost impossible to intercept data and create fake cards or duplicate it. Magnetic stripe cards have personified transaction security technology since the 1970s. While they are convenient and familiar, they cannot stand against the sophisticated hackers and fraudsters that exist today.
3. EMV limits business liability:
To encourage EMV adoption, the bodies and vendors governing the payment card market shifted the liability of fraud on card-present transactions. After October 2015, the onus and liability in case of card fraud lie with the party that least complies with the EMV standard. When businesses upgrade to accept EMV payments, they are no longer the least compliant party in the entire transaction. This means they won’t be liable for compensation in case fraud instances occur.
4. Upgrading to EMV leads to more advanced technologies:
If a business doesn’t upgrade to EMV technology, any card payment acceptance terminal they use is outdated in more ways than one. EMV payment processing upgrades include additional features such as mobile payment acceptance. This means you can add other mobile payment options such as Apple Pay, GPay and other mobile wallets to your payment gateways.
5. EMV improves the customer experience at the POS:
Businesses, vendors and card issuers have acknowledged that introducing EMV to consumers will smooth out operations. Breaking a familiar routine or habit is tough, including the switch from swiping a card to tapping it. With a deeper understanding of why secure payment transactions are necessary, consumers have increasingly embraced EMV technology. According to one Worldpay and Socratic Technologies survey, 73% of consumers in the US have reported their EMV card experience was either ‘very good’ or ‘excellent’.
No solution can eliminate fraud altogether, including EMV. However, it does demonstrate the possibilities when it comes to coordinating actions around combining technologies for a more secure electronic payment ecosystem. Connect with the leading EMV payment processing service providers today and keep your business and customers secure.
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