EMV credit and debit cards offer much greater security than their magnetic stripe counterparts. Already used worldwide, these chip-enabled cards come in two varieties:
- With Chip & Signature EMV payments, customers manually insert the embedded chip into a card reader and authorize retail transactions by providing their signatures.
- With Chip & PIN EMV payments, customers insert the chip into a chip reader and enter a personal identification number (PIN) to authorize payment.
In both cases, the card (and chip) must be physically present at the point of purchase. But Chip & PIN is arguably more secure. Thieves can easily forge a signature, but duplicating a personal identification number is difficult.
Although Chip & PIN cards are already present in most parts of the world, the majority of U.S. merchants still rely on legacy credit card readers (the kind that accept magnetic plastic). But in 2015, new liability rules will go into effect — rules that place the liability of fraudulent transactions on merchants who aren't EMV-compliant.
As you update your payment infrastructure to begin accepting Chip & PIN transactions, what hurdles might you face?
Challenge 1: Hardware Updates
The biggest hurdle is the hardware. In order to begin processing Chip & PIN plastic, you must switch out your current credit card terminal with a reader that is EMV-ready and have a pin pad for customers to enter their PIN.
Prices for this hardware can vary. But experts predict that U.S. merchants may have to invest more than $2.6 billion over the next several years to update their payment infrastructure. This is one of the reasons why EMV adoption has been so slow in the United States.
Challenge 2: Training & Awareness
EMV card purchases are different from traditional swipe & sign credit card payments (the customer — not the cashier — inserts the card into the reader).
As such, you need to show your customers how to properly use the newer payment technology. But you also need to train your employees how to successfully process Chip & PIN transactions (especially cancellations and refunds).
Challenge 3: Complacency
Chip & PIN credit card transactions are more secure and integrating EMV technology can limit your fraud liability and make PCI compliance much easier.
But don’t let these benefits lull you into a false sense of security. There are two things every merchant should keep in mind:
- Chip & PIN's security features only apply to retail environments. When selling products and services online, these chip-enabled cards don't offer any more protection than normal magnetic cards do. In order to make these online payments as secure as possible, you should invest in a trusted payment gateway — complete with P2PE, tokenization and fraud tools.
- You still need to take proactive steps to protect non-financial customer information. Chip & PIN credit cards wouldn't have prevented Target's recent data breach. Make certain that any customer names, addresses and other personal information are securely stored and encrypted.
Need Help Implementing Chip & PIN in Your Business?
Switching to Chip & PIN can be challenging, but it doesn't need to be. Let us help you make the transition as you update your payment infrastructure. To get started, visit: BluePay's Secure EMV Credit Card Processing.