Your customers who accept credit cards as payment need to be EMV-compliant, and the closer they get to achieving compliance by the Oct. 1, 2015, deadline, the better. Many companies will not meet the deadline for new fraud-liability rules and will have to scramble to address the new requirements.
EMV is the new Europay-MasterCard-Visa protocol designed to support the use of “chip-cards,” which contain an electronic chip to improve identification. Instead of “swiping” their cards through a mag-strip reader and signing the receipt, users will dip their card into new readers and enter a four-digit PIN to make use of their credit cards.
Liability—The Big Driver
Today, if you fall victim to credit-card fraud and anyone other than you makes charges, the bank that issued your credit card insures you against the loss. That’s what’s changing.
As of the Oct. 1 deadline, liability for loss due to credit-card frauds shifts from the bank to the party least-compliant in the payment process. If they are not “chip-and-dip” compliant after Oct. 1, this means that the merchant making the sale will most likely be left holding the bag. Since many banks have not yet finished issuing new chip-cards to all of their cardholders, this deadline may yet be extended.
Not Just Retailers
“Almost every business takes credit cards, well beyond just retailers,” explained Jeff Yelton, executive director and general manager of advanced solutions at distributor Ingram Micro. “Hospitals, manufacturers, logistics companies, all take credit cards, and all have responsibility to make this change.”
Yelton added, “If you are a VAR and you have customers, there are high odds that you need to go address this with them. They are going to hold you responsible, maybe not legally, but they will hold you responsible if you haven’t told them about EMV.”
Credit-Card Merchants May Be Misinformed
According to a Sept. 9 article in Software Advice, less than one-quarter (22 percent) of retailers are currently EMV-compliant, nearly a quarter of non-compliant retailers say EMV is unnecessary and almost two-thirds of consumers haven’t been issued EMV cards.
This means that 78 percent of retailers, and an unknown number of other companies that accept credit card payments, still need to be encouraged to upgrade their systems. Given annual estimates of more than $8.6 billion in card fraud in the United States alone, those who believe EMV-compliance to be unnecessary may continue to feel that way until that first big new chargeback arrives. You may be able to spare them that pain and expense.
Channel Opportunity
“The global EMV payment standard is a call to action businesses can’t afford to ignore, and channel partners should embrace as a strategic opportunity to engage with customers and prospects to more easily become EMV-compliant,” said Ingram Micro’s Yelton.
In May 2015, Ingram Micro announced an all-in-one playbook and solution bundle that provides channel partners with a detailed overview of the imminent, global EMV mandate and includes the hardware and merchant services to help ensure business compliance and minimize liability. As part of the new bundle, Ingram Micro Professional Services is providing channel partners with services ranging from assessment and deployment to equipment disposal, solution testing and certification audits.
“Our technology portfolio and professional services extend well beyond data capture and point of sale making it possible to offer a comprehensive Electronic Payments Playbook and targeted, multi-vendor EMV solution,” explained Yelton.
This will help channel partners take the lead in addressing one of the bigger business risks and challenges facing retailers and businesses of all types that accept credit cards today.
More information about EMV compliance is available on the Small Business Administration Website.
Howard M. Cohen is a 30-plus-year IT industry veteran who continues his commitment to the channel as a columnist and consultant.