|August 28th, 2020|
Digital transformation has made things easier and convenient without a doubt. However, with things becoming more open and accessible, there is always a chance for fraudsters and security breaches which make these processes as vulnerable as useful. When it comes to payment processing, security holds paramount importance and methods which enhance the overall security are always considered better and more prudent than those that do not have a robust security and authentication protocol.
One of these improved security measures is embedded in the form of a microprocessor integrated chip (IC) in debit/credit cards. This is also known as an EMV (Europay, MasterCard & VISA) chip and substantially increases the security of card transactions. Most businesses have upgraded to EMV chip enabled card transactions since 2015, when the technology was doled out for small businesses. However, there is still a fair percentage of businesses that have not yet embraced this change and this could result in significant losses due to frauds and loss of credibility. Not to mention that delaying this change may eventually be more expensive for business owners in terms of payment processing too.
EMV smart cards are equipped with the functionality to improve user experience and reduce the liability of frauds. For merchants who use EMV chip cards, liability for in-store frauds shifts to card issuers and banks, however the same falls upon merchants in case of conventional debit/credit card transactions. So far, over 10 billion EMV chip cards are live and the number continues to grow at a rate of 20% each year.
What is an EMV chip enabled card?
EMV chip cards have an embedded microchip which is impossible to duplicate and is tamper-proof. This chip constantly updates user information unlike magnetic stripe swipe cards which are not dynamic. The stripe on a conventional card contains unchanging user information and anyone who can duplicate the stripe with the same information as the original card can siphon off all your money using that fake card. This makes traditional cards a prime target for theft, counterfeiting and frauds.
Contrasting to this, an EMV chip enabled card generates a unique transaction code for each payment, this code cannot be used again. This dynamism makes them safer and more reliable. EMV chip cards can be used for contact, contactless and mobile payments and the technology is being used in credit, debit and prepaid smart EMV cards.
Advantages of using an EMV chip enabled card:
The technology is fairly simple yet substantially powerful to prevent frauds. With the advent and popularity of EMV chip cards, companies in the US have reported a 60% decline in frauds and counterfeit card usage. Businesses feel more at ease even in card-not-present transactions as the safeguards ensure effective authentication and reduce scope for data theft too. These smart cards make it easier for both parties; the customers as well as the merchants. Here are some beneficial features of using an EMV chip based credit/debit card payment option.
1. Improved security and safety of sensitive user data.
2. Global interoperability and increased mobility.
3. The shelf-life of cards as chips are is more resistant to wear and tear than magnetic stripes used in traditional cards.
4. Increment in card spending and online transactions.
5. Boost in business’ credibility and customer relationships.
6. Safety from in-store frauds, card duplication and data-theft.
7. Lowered risk-level in card-not-present transactions.
8. Liability of frauds falls on card-issuers and banks.
9. Competitive advantage over those merchants who are reluctant to switch.
10. Zero paperwork, which and makes business future-proof.
Payments made from an EMV card are processed the same way as conventional cards. It’s done in two steps: reading card data and verification of transactions.
Liability of Frauds:
One major advantage for businesses is that liability for in-store frauds, stolen and counterfeit card transactions is no longer a problem for merchants. The mantle now lies on the shoulders of card-issuers and banks, depending on the terms and conditions of the particular credit/debit card.
For merchants, the switch from traditional to EMV chip card processing solves worry of frauds, conspicuous transactions and data-theft to a large extent. This switch also means adding a new in-store internal processing system and technology for reading the cards. Consumers, on the other hand only have to learn to use the new payment process and get accustomed to the new system.
Making the smart switch to EMV chip card processing:
Making the switch to EMV chip card processing is easy. You can ask your current payment processor or find a new one who can provide you these services. There are also options to add EMV chip reading capability to your existing payment processing systems. It is important to research well before choosing one to ensure that things fall in your budget. However, the benefits from emv capability will counterbalance the expenses for integrating the new system and buying devices.
It is advisable to go for multiple functionality so that you can process other types of payments like NFC (Near Field Communication), mobile and contactless payments. Why not go for the whole package if you are making the switch? All the upgraded tech will pay back huge dividends by minimizing various types of card related frauds. You can also get a minimal loan online for installing these systems in your business.
The most significant benefit would be increased credibility in the eyes of customers. More than the actual money and reduction in losses due to fraud liabilities, your image as a business providing safe transactions will make it soar higher than the competition. The bottom line is that this is the smartest move you can make for your business in terms of credit/debit card payment processing. Don’t wait anymore, make the switch today and start cashing in the benefits.