A Five-Point Checklist for Retailers Making the Move to EMV Before the October Deadline
Credit card fraud is in the United States is at epidemic levels. Last year, the U.S. accounted for more fraud than the rest of the world combined. And the fraud rates are accelerating. EMV technology, which has shown to greatly reduce in-store fraud in the Europe, is finally being rolled out in the United States with an impending deadline in October 2015 when retailers will be liable for in-store fraud for cards that have chips on them.
By the October deadline over 70% of cards in consumer will be EMV-enabled. However, most retailers are well behind schedule in supporting EMV. Where Highline has worked with its partners to implement EMV those retailers are seeing very high usage of the technology with EMV transactions accounting for more than 40% of all transactions. In some stores EMV amount to almost 60% of all credit card transactions. Apple pay currently accounts for about 6% of transactions but this is a figure that growing.
These are much higher numbers than we expected to see since we installed the first system in New York in April, but it does demonstrates that consumers are armed with the new secure chip cards and are out in stores using them.
With only two months left until the legal liability shift, retailers need to catch up as the public is out there ready and spending.
Here are five tips for retailers who are making the change to EMV, with only eight weeks before the liability shift to EMV that retailers should consider as they look for the right solution for them.
1. If credit card payments are integrated with their POS software call the POS vendor and ask what for specific recommendations for upgrading. Do they require new hardware for processing EMV cards? Will their software be ready in time for the October 15 deadline? If not, when? Regardless, ask what steps to take in order to become compliant.
Beware of companies selling “EMV-ready” terminals. Ask specifically if the vendor is certified to process EMV transactions today.
An EMV-ready terminal is merely capable in principle of accepting EMV cards; it does not mean that the vendor is certified to process EMV transactions now. EMV certification is a complex process that involves the terminal vendors (e.g., Verifone), software running on the terminals, the processing network (e.g., First Data) and the credit card companies. So ask your vendor if they are
EMV certified.
2. If credit card payments are separate, you can shop around for options. Call your payment processor and ask the same questions as above. If your payment processor isn't ready or won't be ready for many months after the deadline you should shop around. Some processors (e.g., First Data) have been ready for a while.
You might be able to get the early termination fees waived from your existing processor since they haven't yet complied with the new requirements for EMV.
3. Ask your processor if they support Apple Pay, which lets customers securely pay with their phones. If you're going to upgrade hardware now, you may as well get Apple Pay too. Most processors advanced enough to do EMV now also support Apple Pay.
4. Treat the EMV requirement as an opportunity. If your existing software vendor or processor isn't ready, chances are you on obsolete platform. Shop around for a modern, ideally cloud-based mobile system. A cloud-based system dramatically reduces your administration and start-up costs and your data is available from anywhere, and anytime.
5. Look for deals. Some new systems, such as Highline's, offer the latest in cloud/mobile technology but don't require any investment in hardware. During the EMV shift, they're giving away their mobile EMV reader. The software is free and credit card transactions are a flat 2.95%.
We are sitting at the convergence of three major changes that are having a huge impact on in-store retail today. First the introduction of the EMV standard in the US and the liability switch that will happen this October; secondly, the move to the cloud to help retailers innovate rapidly while simplifying their businesses and reducing operating costs; finally, the introduction of mobile technology into the retail space dramatically changing the consumer experience, how they move through a store and what they do when they are there.