On October 1, 2015, chip-enabled EMVs (Europay, MasterCard and Visa) became the "unofficial" standard for all in-store credit card transactions within the U.S. These new liability rules will change how the credit card industry handles fraud.
Although upgrading to EMV isn’t mandatory for merchants or credit card issuers, failure to adopt this new standard carries significant risks:
- Merchants who use legacy terminals (when their customers use EMV cards) must cover fraudulent losses — if they occur.
- Card issuers who provide swipe and sign plastic (to customers who shop at EMV-ready terminals) must cover any fraudulent losses.
These more secure, chip-enabled card options have already become the standard worldwide. However, in the U.S., adoption has been relatively slow — despite the upcoming deadline. Card issuers have done a pretty good job since they’re already accustomed to sending out new plastic every few years. The lag exists mostly among vendors:
- Many merchants aren't aware of the EMV deadline and don't understand the dangers of not upgrading.
- Some merchants are aware, but they have a hard time justifying the out-of-pocket expenses associated with equipment upgrades and employee training. This is especially true for smaller businesses with limited budgets.
Below are some tips for selling small merchants on the importance and urgency of EMV technology.
1. Frame the Upgrade as an Investment – Not an Expense
Experts predict that upgrading to EMV technology will cost U.S. merchants more than $2.6 billion, but this outlay pales in comparison to the cost of non-adoption:
- There is a direct financial cost for merchants who must cover financial losses.
- There is also an indirect cost when you factor in time spent disputing and resolving fraud claims.
- Don’t forget diminished consumer confidence. No one likes to shop at stores that can’t provide basic credit card security.
Framing upgrades as an investment becomes much easier if you pair it with the following strategy:
2. Target Those Who Have Been Hit by Fraud
Approach those merchants who have experienced fraud in the past. If possible, quantify those losses so they can weigh the costs and benefits of not upgrading.
3. Target Those Who Haven't Upgraded in a Long Time
Even legacy terminals need replacing every now and then. Focus on merchants who haven't updated their equipment in a while. Since they have to buy new readers anyway, why not make them EMV-ready terminals?
4. Highlight the Risks
As more merchants switch over to EMVs, those who remain behind become easier targets for fraud.
5. Bundle Incentives and Offer Exclusive Perks
If you normally provide perks and incentives, consider making them exclusive for those who adopt the new EMV standard.
6. Solicit Feedback
Most merchants resist upgrading due to ignorance or indifference. However, if you can pinpoint the precise reason behind their hesitation, you can tailor your approach to fit their needs. Sometimes it's just a matter of reducing friction in a way that resonates with them.
7. Send Frequent Reminders
It’s easy for your message to get lost in all the additional promotions about NFC upgrades, Apple Pay and countless other payment options.
This isn’t a reason to stop trying. In fact, you need to re-double your efforts to make sure the message truly sinks in. Change won’t always be immediate, but as stragglers find themselves dealing with more instances of fraud, they’ll likely become more receptive.
For more EMV conversion strategies, contact our payment security team today.