EMV cards that contain a silver or gold computer chip have made their way into the wallets of U.S. consumers, but far too many retailers have chosen not to accept the more secure payment technology. This decision, apparently made for the sake of convenience, is short sighted and puts consumers and businesses at risk. This holiday shopping season, the greatest gift retailers can give themselves and their customers is the gift of payment security.
EMV, which stands for Europay, MasterCard and Visa, is an electronic payment technology that has been used successfully to prevent fraud in Europe for years. In fact, since EMV was introduced in Europe, credit card fraud has fallen by 80 percent. Meanwhile, fraud in the United States has increased by 47 percent.
Unfortunately, a Newtek Business Services survey found that nearly 25 percent of small businesses that accept electronic payments have no intention of upgrading to EMV. Furthermore, only 20 percent of EMV-ready terminals have been switched on to accept chip cards, according to a Mercator Advisory Group EMV migration research note.
What these small business owners don’t seem to understand is that in addition to compromising their customers’ security, they are putting themselves at great risk as well.
Losses from counterfeit credit card fraud reached $3 billion in 2014, according to the Aite Group, and is expected to hit $3.6 billion by the end of this year. The advent of EMV technology in America has come with an important liability shift and there is now an onus of responsibility on retailers to keep customer information safe.
Businesses that fail to use EMV chip-enabled payment terminals can now be held responsible for the costs of counterfeit card fraud. While some business owners cite the cost of new terminals—typically a few hundred dollars—as a deterrent for upgrading their payment security, the costs associated with fraud could be enough to shut a small business down for good.
In my nearly 30 years working in retail management and with retail technology, I have seen the consequences of irresponsible data handling time and again. Deciding to put customers’ financial information at risk is not just bad business—it’s wrong. This holiday season, retailers should give their customers the gift of payment security. It may not bring peace on earth, but it will certainly allow for financial peace of mind.
If you are interested in a website with free resources, events and tools related to payment processing and EMV, check out Master Your Card at https://www.masteryourcardusa.org/ which is provided to you by MasterCard.