Today, October 1st, marks the official deadline on EMV card changes for retailers. EMV, which stands for Europay, Mastercard, Visa, is a secure payment technology used throughout Europe since 2005 but newly introduced to the U.S. It uses a small computer chip embedded in a credit card rather than the magnetic strip to provide a more secure transaction at a credit card terminal. Unlike the static information held by the magnetic strip, the chip provides dynamic authentication information which changes for each transaction making it more difficult to counterfeit. This is good news for consumers who use credit cards for in-store purchases, but for a majority of retailers it may mean investing in new terminals that can read the new chip.
So, why should retailers be concerned? After today, businesses that do not have EMV reading terminals will be held liable if fraud occurs on an EMV-ready credit card; not the credit card company. As more magnetic strip credit cards are being replaced with cards fitted with the EMV chip, it’s important for retailers to begin investing in new terminals, whether purchased or leased, if they haven’t already. The cost of new terminals may not be cheap, but in comparison to potential losses, very much worth the expense.
A few key items to remember:
- Magnetic strip-only cards can still be used/accepted. Banks and credit institutions are still working to send new cards that are EMV-equipped. However, that does not mean retailers should wait to update their terminals.
- EMV technology will have no effect in online purchase security. The dynamic authentication chip only offers protection for in-store transactions through an EMV reader. Consumers should continue to only enter their credit information in secure, reputable sites.