By Michael Gavin
Cayan
This coming October, EMV (Europay, MasterCard and Visa) will become the new standard payment method in the United States, replacing traditional mag stripe cards. As the last major country to implement EMV, the United States launched an extensive, costly implementation effort, but adoption of EMV-enabled equipment has been slow. Indeed, many businesses are unprepared for the EMV shift.
According to a recent survey conducted at the National Retail Federation's Big Show 2015, more than half of retailers are not ready for EMV (see www.morningstar.com/invest/articles/1192013-more-than-50-percent-of-retailers-not-fully-prepared-as-emv-deadlines-approach.html).
Whether business owners are unaware, still evaluating their options or willing to take the risk, a lack of urgency exists on the part of U.S. businesses to make the switch. With only eight months until the liability shift goes into effect, industry professionals need to take action and educate their customers on EMV. This article contains tips to facilitate that effort.
As industry professionals, it is critical for you to have knowledge of EMV. Your customers will approach you with several questions; in particular, they'll want to know why EMV is being enforced and how it will affect them. You must be able to provide the answers.
Escalating fraud in the United States prompted the transition to EMV. In 2013, the country reported $11 million in credit card fraud, which is almost half of the world's total credit card fraud (see < a href='cayan.com/preparing-your-business-for-emv' target="blank">cayan.com/preparing-your-business-for-emv).
Today, U.S. businesses are experiencing increasingly frequent data breaches. In fact, 43 percent of businesses experienced a data breach last year (see www.reviewjournal.com/business/money/7-most-devastating-data-breaches-201). To help reduce fraud, the card brands are finally pushing for migration to EMV in the United States.
An EMV card contains a small chip that creates a unique token for every transaction, making it more secure and difficult to counterfeit. To make an EMV card payment, a consumer inserts the card into an EMV-capable terminal where the EMV chip is read and the card remains inserted throughout the transaction. Businesses will need EMV-capable terminals and equipment to accept EMV cards.
Also, as of October 2015, businesses may be held financially liable if they process fraudulent transactions with non-EMV compliant equipment. While small businesses may be reluctant to upgrade their equipment due to cost, they could experience much more costly consequences if they fail to do so.
Although the only data breaches we typically hear of in the news pertain to large companies, they occur more often than we would suspect to small businesses. In fact, criminals target small businesses, causing significant, negative repercussions (see www.latimes.com/business/la-fi-small-data-breaches-20140705-story.html#page=1). If a small business experiences a data breach, it could be shut down. According to Mashable, 72 percent of businesses that suffer a major data loss shut down within 24 hours (see www.latimes.com/business/la-fi-small-data-breaches-20140705-story.html#page=1).
Once EMV becomes the norm and the preferred payment method, your customers could risk losing business if their customers do not feel secure about paying at their businesses. With the risk of not only losing sales but also going out of business entirely, your customers have no reason not to upgrade.
Assessing the different payment solutions can be complicated. That's why businesses rely on trusted industry experts to provide recommendations. Schedule a meeting with your customers and walk them through the EMV equipment options. Understanding their distinct business environments and needs should enable you to make a practical recommendation for them. You will also want to develop an EMV road map for implementation, including the plans of when to switch over their current equipment.
When equipping your customers to accept EMV payments, you might as well discuss near field communication (NFC) payments as well. Mobile payments are finally catching on with the launch of Apple Pay in 2014, and mobile popularity will continue to rise. If your customers are upgrading, recommend that they consider equipment with both EMV and NFC capabilities.
Encourage your customers to act quickly and place their orders for EMV equipment as soon as possible. Although the majority of businesses are not yet prepared, an influx of EMV equipment orders is predicted for the third quarter of this year. Those who procrastinate will risk not receiving their equipment in time for the liability shift. The larger, multilocation businesses may get ahead of them in line, causing your customers' EMV implementations to be delayed.
The fact that the majority of businesses are not prepared for this transition opens up opportunities for you with both existing and new customers. The EMV countdown is on. Get out in front of your prospects and customers to help them prepare in time for the transition.
As Cayan's Senior Vice President, Sales, Michael Gavin is responsible for day-to-day management of the company's direct sales efforts including organizational structure, sales forecasts and overall strategies. He also oversees all sales activities within the company's agent channel, a growing network of more than 400 independent representatives throughout the United States. Michael has served as a key leader within the organization since joining the company in late 2000. An individual who has made numerous key contributions, Michael was the architect behind the design and development of the agent channel. Michael is a graduate of Merrimack College where he earned his Bachelor of Arts degree in Political Science. Contact him at mgavin@cayan.com.
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