From knucklebusters to the upcoming EMV and contactless technology, the payment landscape is changing once again for all merchants. Way back in the early days of credit card processing, you had to lay a transaction slip on a “knucklebuster”, place the credit card on the machine and crunch, crunch, you had an imprint of the card along with the transaction details. You had to call in for an approval and wait and wait for the authorization. Then came the dial-up machine with the familiar buzz and whining sound as the transaction was processed. From that point we began seeing machines constantly evolving with more bells and whistles and increasing speed. Then there was wireless transaction processing which is pretty much where we are today.
Next, in the payment landscape, however, is considered to be more of a leap in technology rather than just another step. Not only will the technology change, but the cards that we use to make purchases are receiving change as well. This change has been long overdue and is being implemented primarily to protect the customer data and prevent the bad guys from stealing what isn’t theirs.
You’ve probably heard about it and if you traveled to European countries, may have experienced it for yourself. Allow me to introduce you to EMV, (EuroPay, MasterCard and Visa). This is the future of credit and debit card acceptance and the US is finally getting on board. As you may know, EMV cards are embedded with a “smart chip” that securely stores cardholder data and requires authentication with every transaction. Your customer inserts their card into a smart chip reader found in EMV ready terminals (all merchants will be required to have these machines by October 2015 or subject themselves to substantial risks). The card remains in the terminal for the entire duration of the process allowing the chip to create a unique, one-time, digital signature for that specific transaction. The data that is transmitted by the EMV chip card is constantly changing which greatly minimizes the risk related to fraudulent transactions. In other words, it makes any information potentially stolen by a hacker to be completely useless.
As previously mentioned, merchants will need to be EMV ready by October of this year. The launch of this technology shifts the liability to the merchant (currently and since the beginning payment processing, the liability for fraudulent transactions was with the issuers). If you, the merchant, accept a credit card that was lost, stolen or fraudulently replicated, your business may be financially responsible for any and all losses. As you might imagine, this could be potentially devastating to the life of your business. Card issuing entities have been issuing replacement cards with the EMV chips, and, in fact, you may have already received one yourself.
There is much more to be discussed on this topic but suffice it to say, at this point… EMV is coming and merchants need to be ready for their protection and that of their customers as well. Will you be ready?