EMV credit card technology comes in two different varieties:
- Chip & Signature – after inserting their chip-enabled cards, customers must sign their name in order to authorize a purchase.
- Chip & PIN – after inserting their chip-enabled cards, customers must enter in a personal identification number (PIN) to complete a transaction.
In both cases, the credit card must physically be present at the point of sale. But Chip & PIN offers even greater security protection since the 4-digit PIN is harder to forge than a signature.
Because of these security features, EMV credit card processing has already become standard in most parts of the world. In fact, the United States is the last major market to adopt Chip & PIN technology — mainly because of cost.
In order to begin processing EMVs, you must invest in newer terminals that can leverage the security features that come with each chip-enabled card. This might cost you anywhere from $100 to $600. You must also invest in employee training to teach your staff how to process, cancel and refund Chip & PIN transactions.
Altogether, making the switch could cost Stateside merchants as much as $2.6 billion over the next few years.
So is making the transition worth it?
The quick answer is yes.
Although EMV credit cards are still "optional" in the United States, the technology will become mandatory in 2015. Making the switch is worthwhile simply because you don't really have a choice.
But mandatory or not, updating your payment infrastructure offers some important benefits.
Why Switching to Chip & PIN Is a Worthwhile Investment
On the surface, investing $100 or more to update your credit card processing may seem like an unnecessary cost. But there are several advantages to making your payment system EMV-ready:
1. Fewer Fraudulent Losses
The most obvious benefit is that your business will experience less fraudulent activity after switching over to Chip & PIN. The embedded chips are nearly impossible to clone, and the personal identification numbers are extremely difficult to hack.
Moreover, continued reliance on magnetic stripe readers could actually increase your exposure to fraudulent losses. Older credit cards (and terminals) represent low-hanging fruit for criminals. As more merchants switch over to EMVs, those that delay their updates become the easiest and most obvious targets.
2. Reduced Liability Exposure
To say that EMVs will soon become “mandatory” is a bit misleading. Merchants will always have the option to not update their terminals.
But in 2015, new liability rules will go into effect. Whichever side of any transaction isn’t EMV-ready is responsible for any fraudulent losses that may occur:
- If your customers have Chip & PIN and you have a legacy terminal, you cover any losses
- If your customers have magnetic credit cards and you have a Chip & PIN terminal, the card issuer covers any losses
3. Increased Sales
The above benefits are about savings (or rather, cost avoidance). But implementing Chip & PIN can also help you boost sales.
In an age of rising credit card fraud and data breaches, customers are more likely to trust merchants who understand the importance of protecting sensitive financial information. Adopting Chip & PIN credit card processing can help increase consumer confidence in your store and bring you more revenue.
To learn how BluePay can help make your payment processing more secure, contact our sales support team today.