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September 21, 2015 Experts Corner

Retailers must prep for new card-swipe rules, technology

Julie Pukas

There's been much discussion and attention surrounding the payment industry's shift to EMV (Europay, MasterCard and Visa) chip-card technology. Already a common technology in countries across the world, EMV chip-enabled cards will become the new payment standard in the United States by October.

If you're a consumer, EMV chip-enabled cards can add an additional layer of fraud protection. These cards contain an embedded microchip that turns cardholder information into a new, unique code every time the card is inserted into the payment terminal that is intended to decrease the potential for counterfeit card transactions.

If you're a merchant, there are a few things you need to know in order to become EMV compliant. First, merchants are required to update their point-of-sale systems to accept chip cards. In October, liability for fraudulent transactions will shift to the transaction participant with the least amount of EMV technology, and card issuers have already started to roll out EMV chip-enabled cards. As such, businesses using non-EMV compliant terminals will assume liability for any fraudulent transactions associated with EMV chip-enabled cards.

This has the potential to be truly detrimental to a business' finances and is a key reason to adopt the new payment standards. Additionally, upgrading to EMV standards ensures your business will be able to accept almost all payment methods, and better able to process credit-card payments from international customers.

It's also important to consider the day-to-day impact that the EMV transition will have on consumers. Consumers will be faced with an entirely new payment process, and not all EMV payment terminals are identical and not all businesses will have them in place come this fall. As a result, merchants will be the lynchpins to making this transition a success.

Here are four tips for small business owners and merchants to consider when making the switch to EMV payment terminals:

1. Investigate your technology options: When making a technology investment for your business, it's critical to research and explore the different options. It's worth your while to do the same when looking for new EMV-compatible payment terminals. Merchants should choose the most appropriate technology that meets their unique business needs and customer payment preferences. 

2. Seek EMV training: To make the adoption a success, business owners should commit to training staff on the new features and functions of the EMV equipment. According to the U.S. Census Bureau, as of 2012, Connecticut employed over 720,000 small business workers. That's a great deal of workers who could benefit from learning the ins and outs of the new transaction process.

Be sure to ask your financial institution if they offer EMV training and take advantage of their expertise.

3. Invest the time: While the switch will indeed require a time commitment and up-front investment, adopting an EMV-compatible payment terminal is a smart business strategy. Not only is it a more secure transaction for consumers, but it decreases the burden on business owners in the event of a compromise.

4. Create a better customer experience: Keep in mind that consumers may be faced with different payment terminals when visiting their local merchants. Create a better customer experience by practicing patience during the EMV transition. Consider it as another touch point and way to build trust with your customer by offering guidance through the new payment process. 

EMV provides peace of mind for consumers because it's a more secure payment process. Merchants with EMV terminals will require customers to insert the card, write their signature or enter a PIN, and remove the card only after the transaction is complete. The EMV payment process is a more secure transaction for consumers, and a smart strategy for businesses. 

Julie Pukas is the head of U.S. Bankcard and Merchant Services at TD Bank.

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