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EMV: What Every Business Should Know


A big change is coming this year, and many businesses still aren’t ready. In October, any business that hasn’t changed its Point of Sale (POS) over to a new system may face liability for any fraudulent charges that take place. The change focuses on the way customer credit card data is collected at the register.

If your business accepts credit cards using a POS terminal, chances are you’ve already heard of EMV. EMV, which stands for Europay, MasterCard, and Visa, is a global standard for inter-operation of integrated circuit cards.  You may even be feeling pressured to make the switch, but you’re putting it off. There always seems to be something more important to do. But October is rapidly approaching; so it’s important to know exactly what the risks are for credit card payment acceptance after October 1.

EMV Explained

Short for Europay, MasterCard, and Visa, EMV technology uses a chip embedded in the card rather than storing information on a magnetic strip. The technology is common in developed nations for a while, with America being among the last to make the switch. As a result, the U.S. has one of the highest credit card fraud rates in the world.

Over the past couple of years, consumers have been issued new credit cards with the chip embedded on the card. Many were unsure why they received the new plastic and will likely continue to be unaware of EMV until retailers begin switching to it. Walmart is one of the leaders in moving to the technology, however, and has already begun directing customers through the process of paying using EMV instead of traditional swipe methods.

The Difference

The biggest differences customers will notice is that they’re asked to insert their card into a slot at the base of the credit card pinpad rather than slide it along the edge. The card rests halfway in the machine until the chip has been read. Afterwards, the card can be removed and the transaction will progress as usual.

Customers will go through the same process with debit cards as with credit. ATM machines are being upgraded with new EMV readers, but customers will likely see little change in that experience, since ATM cards are inserted in a card reader rather than swiped already. The learning curve for customers should be fairly quick, as long as employees are trained to guide customers through the process.

The Liability Shift

Surveys still reveal that a percentage of merchants won’t be ready for the switch on October 1. Many of these are smaller businesses that lack the resources to change all of their equipment to the new system. Some of these retailers deal with a smaller transaction volume each day, which may reduce the feeling of urgency larger businesses have.

However, it’s important that businesses of all sizes understand the liability shift, since it brings a potential large cost for businesses. Currently if a fraudulent transaction takes place, the bank takes the liability but in October, the liability will switch. Responsibility for the bad transaction will go to the party that has the least security in place between the bank, the retailer, and the customer. If the bank has the technology in place and the customer has a smartcard, the merchant will be liable. If the bank and retailer have upgraded but the customer has an older card, the customer will be liable. For this reason, it’s important that both businesses and customers make sure they’re ready by October to avoid paying penalties.


Despite claims that EMV will prevent fraud, there are criticisms of the technology. One is that the U.S. isn’t requiring a PIN with each transaction as Europe does. Experts have cautioned that without that extra protection in place, fraud is still a serious risk. However, both MasterCard and Visa have stated that the top cause of credit card fraud is counterfeiting and the “dipping” method used with EMV takes care of that type of fraud.

Another concern for fraud experts is that the switch to EMV will simply drive criminals to be creative with the way they commit theft. Online retailers may be especially vulnerable, since EMV doesn’t alter those transactions at all. By being aware of this risk, businesses may be able to beef up their online security to protect themselves.

What to Do

For most businesses, help is just a phone call away. The first call should be to your payment processing provider, which can walk you through what you’ll need to do to upgrade. You may find that you can access new equipment for little to no cost. There are other options, as well, such as moving to a mobile terminal where you accept cards using a tablet. If you haven’t evaluated your POS options in a while, you’ll be surprised how much has changed.

If the price your processing provider quotes is too high, don’t be afraid to shop around for a new provider. There are numerous options out there and all of them are working hard to equip merchants with the new technology. Even if you’re under a contract, the amount you’ll save by switching to a new provider could more than offset any penalties you’ll pay. This is especially true if the new provider is offering free equipment and other deals to entice companies to make a change.

Training Staff

One reason to get POS in place ASAP is so you can acclimate employees to the new system. Employees need to know how to scan new cards, but how to walk customers through the process, as well. This means they should be comfortable with the technology well before the deadline.

In addition to customer-facing staff, businesses should also ensure their accounting team is aware of the change, especially if it will impact your budget. Accounting professionals have likely already been reading about the shift, but they still should know it’s taking place. The only real change to your accounting processes is that a switch to new equipment could add to your monthly expenses, so they should be aware of it well in advance.

EMV will change the way customers pay at the terminal. The change to new equipment also gives merchants the opportunity to upgrade to terminals that are NFC-enabled to accept mobile payments. This change will prepare businesses for the many ways payments will change over the next few years.

CMO at CRS Group
Entrepreneur and Venture Advisor for the Network of Things Fund a Draper Nexus Fund. Newlands received a Bachelor of Laws and he is qualified as a Lawyer. He gained his Green Card by being recognized by the US government as an “alien of extraordinary ability.” Newlands is the author of “Online Marketing: A User’s Manual” published by John Wiley. He is former President of He has been the CEO and Founder of multiple companies

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