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Make a smooth transition to EMV payment processing

You've heard all about the switch from magnetic strip cards to those that are chip-enabled, and now the Oct. 1 deadline to become Europay, MasterCard® and Visa® (EMV) compliant is looming.

While the switch will offer numerous benefits and protections — U.K. businesses saw a 60 percent drop in fraud after adopting this technology, according to a FICO whitepaper — and making the switch can protect you from being liable for fraudulent purchases — it is a considerable undertaking for businesses. (Need to get up to speed on the changes? Check out our past post on microchip credit card technology.) 

Here are some tips for making sure your business is ready for the new technology:

Take a look at your infrastructure

Have you begun the process of upgrading your systems, such as card readers and software?

You’ll need point-of-sale systems that can read the new chip transmissions and process them via such methods as Chip-and-Signature or Chip-and-PIN. If you've replaced your equipment in the past few years, you may already have EMV-capable machines that just need that function turned on. If you haven’t already, start thinking about your equipment upgrade now. When selecting a new terminal, try to get the most recently approved and look for ones that offer competitive plans with manageable fees and upfront costs.

If you will be utilizing contactless payments (or those purchases made by simply tapping the card in front of an enabled machine), you will need to get terminals that support MasterCard's PayPass 3.0. Those merchants using readers for offline sales (for example, Square for mobile) will need to get new versions of these readers that accept EMV payments.

Make sure your network is compliant. Testing and approval is necessary for each payment network before it’s launched. You'll also need to ensure other measures are in place, including network-specific applications. Skipping such steps may result in technical issues that require costly software upgrades and re-launches down the road. Unsure of what steps you need to take? Contact your card processor for assistance.

Plan for updates

The software used by EMV technology updates more frequently than traditional credit processing software, so consider investing in an automated management system to update your terminals to avoid cumbersome manual updating.

Maximize the anti-fraud benefit

If you’re already upgrading your systems, consider implementing other anti-fraud and anti-data-theft measures, as well. Your card processor can help you sort out which may be a good fit for your business.

Though magnetic strip cards will likely be used less and less, they won’t be going away completely, so you may opt to wait to make these changes at a later date, particularly if fraud is very low for your business. (For business owners concerned about the costs associated with the changeover, Visa is offering an incentive package to help cushion it.)

If your business gets payment authorizations over the phone, online or in the mail, EMV won’t affect those at all. However, experts expect an uptick in card-not-present fraud because EMV implementation will make it harder to perpetrate retail fraud; make sure you have such measures as address and CVV2 security code verifications in place.

If your business is affected by EMV, remember: Processing a chip-enabled card on the old magnetic strip system will result in your business being responsible if the purchase is fraudulent. Is that a risk you’re willing to take?

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The information contained herein may not represent the views and opinions of California Bank & Trust, a division of ZB, N.A. or its affiliates. It is presented for general informational purposes only and does not constitute tax, legal or business advice.
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