🔒Navigate new EMV chip-card standards

If you have not transitioned your payment systems to comply with EMV chip-card standards, you are now liable for chargebacks related to counterfeit card fraud.

You are not alone, despite the EMV liability shift date having already passed, many merchants held off as they were concerned about switching their systems during the busiest time of year — the holiday season, well past the October deadline. Although gaining momentum, many retailers are not prepared for the switch. Only 17% of Visa's merchants had converted to the new technology, though half are expected to by year's end, Visa CEO Charles Scharf said in an investor conference call in February.

Though newly issued cards will continue to be printed with a magnetic strip for the foreseeable future, there are EMV benefits for both consumers and merchants:

• Travelers from Europe will be able to utilize chip cards in Maine and across the country, but Mainers traveling to Europe will have an increased feeling of security when using their cards overseas.

• The new technology allows your customers to use new forms of mobile phone payments, such as Apple Pay and Google Wallet.

• The microprocessor chip embedded in the smart cards contains information needed to use the card for electronic payment, and is protected by various security features.

• Transactions are more secure with EMV-capable equipment, which reduces fraud costs due to reduction in duplicate cards and cards that are more difficult to counterfeit. Fewer chargebacks are also a benefit as smart card technology is able to prove that a card is present.

In cases of fraud, liability will change and varies by card brand. MasterCard, Visa, Discover and American Express have each created a slightly different policy for instances of fraud.

As a merchant, there are some things that you should consider and speak with your provider about before upgrading your systems to ensure you are getting what you and your customers need.

• Many retailers would prefer a payment system that also has the capabilities to track and manage inventory. These systems improve the accuracy of inventory orders and increase operational efficiency.

• When upgrading your payment technology it may be the right time to implement a gift or loyalty card program. These programs are one of the most effective forms of advertising, and are often much less expensive than traditional advertising.

• Ask yourself if you are getting more corporate cards than you used to. If so, this may be an incentive to upgrade, as well. Adding Level II or III data can increase security while decreasing cost on these transactions.

• Ensure that your processor is not going to upgrade your systems to anything that is their own proprietary technology. These are often more expensive, not as adaptable and leave you dependent on the developer.

• With the increasing popularity of contactless payment, such as Google Wallet and Apple Pay, you may want to also consider including these capabilities in your new system.

• Because of the added step of consumers entering their cards into the payment terminal, make sure that your terminal is located in an optimal spot. If you are unable to pivot the terminal for the customer, it may make sense to add a customer-facing PIN pad device.

• EMV card payments have such robust security that it does take longer for the card to authorize. You may want to consider upgrading your equipment connection from an analog line to an Internet-based line.

Upgrading your payment systems to comply with EMV chip-card standards not only helps shift the liability for counterfeit card fraud, but also helps to ensure secure transactions and safety for your customers when making a purchase.

Patty Sanville is a senior account analyst at Nationwide Payments in Portland. She can be reached at psanville@getnationwide.com or by calling directly 207-329-3771.

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