Swipe No More As Retailers Convert to EMV Microchips

October 09, 2015 | B2C Retail


Are you ready? Retailers get ready as credit/debit card chips are due to replace the traditional magnetic stripe. With card fraud running rampant, the major credit and debit card issuers have banded together to enforce usage of chip-enabled EMV cards. EMV (based on the Europay MasterCard Visa payment standard) are far more secure than their magnetic stripe counterparts that store data. Anyone accessing that data captures sensitive card and cardholder information that can be used to make purchases. EMV cards, on the other hand, send unique, encoded data for processing every time.

Here’s where it will get interesting for retailers. Effective tomorrow October 1, 2015 the major credit card networks have agreed to shift financial responsibility for in-store losses due to counterfeit card fraud to the party using the least secure technology. Therefore, if payment is presented using a chip-enabled card but the retailer hasn’t invested in the chip reader, the retailer is liable for loss and fraud. Merchants that want to avoid this liability should implement EMV chip technology in their POS devices before the deadline though researchers estimate only 27% of merchants will be EMV-ready by the deadline.

What will be the costs for retailers making the move to EMV? Forbes writes, “Fortunately, many credit card processing companies have new equipment ready for merchants that will accept the chip card as well as magnetic cards – such as the Square Chip Card Reader that was introduced in July 2014 and available for only $29 – while companies like Chase Paymentech, First Data and Verifone are offering full-sized, more fully featured Wi-Fi countertop chip terminals ranging from $129 to $319. Most of these options will also welcome slide and swipe features so that businesses can accept both chip and swipe cards – helping to overcome at least one hurdle in this EMV race.”

Other concerns for retailers include training employees in this new technology and helping customers wait out the additional time it takes to “dip” the chip card into an EMV POS device which will result in slower transactions and longer lines.

Posted by Andrew Changelian | Request as a Speaker

Client relationship manager & quarterback of complex integrated marketing campaigns. Family man & lover of all things Boston. Into sharp suits & leather shoes.