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Tech Guest Viewpoint: Five Ways EMV will Help Smaller Retailers


Today, nearly half of the world’s payment cards are EMV-enabled, meaning that the cards are embedded with special computer chips that help reduce counterfeit card fraud. The cards also protect retailers and consumers against losses caused by this fraud. The prevalence of EMV cards will only continue to increase with the upcoming liability shift in the U.S. in October, when merchants that are not EMV-compliant will be held liable for financial losses incurred from counterfeit card fraud.

With the number of increasingly sophisticated (and costly) breaches impacting more U.S. consumers and organizations every day, it has become even more critical for retailers of all sizes to prepare themselves for this upcoming deadline.

The Identity Theft Resource Center confirmed that as of April 2015, 270 confirmed breaches were reported this year alone, with more than 100 million records being exposed. This is a challenging reality for organizations of all sizes, but even more startlingly, 90% of breaches occur in small businesses, with costs averaging over $35,000 per incident. In other words, although data breaches at the country’s largest companies attract the vast majority of media attention, small businesses are far more susceptible to an attack.

EMV technology is an important, preliminary step toward altering that landscape. Along with encryption and tokenization technologies, the use of EMV as part of an overall layered security solution allows business owners to defend against fraudulent card use while protecting card data from hackers.

Here are five ways smaller retailers will fare better after they start accepting EMV:

1. Security

Security is a factor of the utmost importance. Smaller retailers will be able to reclaim a better sense of security and safety through the adoption of EMV technology. Seen as an added layer of security, EMV chip cards use cryptograms, one-time use codes for each transaction made.

Why should smaller retailers care about cryptograms? Quite simply, the migration to EMV technology allows business owners to ensure that only the rightful card holder can use the chip card, protecting against lost or stolen card fraud. The technology also protects data on the chip against unauthorized changes, which protects business owners from the use of counterfeit cards. EMV technology has successfully reduced face-to-face fraud around the world.

2. The elimination of liability for fraudulent claims

In an increasingly digital and social world, a data breach can result in significant financial and reputational damage to business owners. The October 2015 liability shift will only heighten that risk. It is incumbent upon all retailers to mitigate risk by incorporating EMV technology into their operations. Smaller retailers cannot afford to ignore this fast-approaching change, and taking this precaution will help business owners prosper while protecting themselves and their customers.

3. Ongoing and future business costs

Today, retailers researching payment acceptance options must think beyond accepting and processing payments. Retailers should consider how the implementation of “smart” EMV terminals factor into a broader business strategy. Research and preparation can help business owners make a long-term investment to protect against both financial (and legal) issues once the shift has been made.

4. Customer loyalty

Investment in EMV technologies is not just about protecting business owners. It also demonstrates a commitment to enhanced customer data security and protection that can improve a customer’s experience. Ultimately, improved customer experiences will likely lead to increased customer loyalty, putting retailers in a better position to sustain success.

5. Paving the way for future technology adoption

The velocity with which technology is changing the payments landscape continues to increase. Innovation, changing consumer habits, and the rise of mobile payments will lead to myriad new options for business owners and their customers. Consumers want convenience, but they also demand safe, secure transactions regardless of where they are shopping.

The stakes are higher than ever for retailers of all sizes, and preparation will be essential to keeping pace. Every retailer must evaluate available options for transitioning to an EMV-enabled landscape. The time to act is now.

Paul Kleinschnitz is senior VP, cybersecurity Solutions, First Data

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