As of October 1, liability for fraudulent payment card transactions shifts from card issuers to acquirers or merchants, with the least EMV-compliant party responsible for covering the amount of the transaction. And while many SMB merchants are researching what the shift would entail, many are still concerned about the costs involved.
Here are five ways to help SMB customers transcend the question of cost of EMV solutions.
According to Beatta McInerney, business development manager, payments, for ScanSource, “The biggest barrier of paying for an EMV-enabled system is budgeting. Speaking with merchants early will help them set aside funds in their budget cycles to pay for the necessary upgrades. The availability of Hardware-as-a-Service (HaaS) programs also allow for creative financing for many merchants.”
While most of the breaches that have made recent headlines have affected large numbers of cardholders, once the EMV transition is in place, cybercriminals will take advantage of those merchants who have not upgraded to chip-and-pin technology from the mag stripe. As Will Atkinson, president of CAP Software, explains, “Fraudsters intent on using stolen or counterfeit cards will most likely begin targeting merchants not using EMV capable systems, so there is a clear risk. However, I’m not sure how clearly that message would make it to the marketplace.”
McInerney added, “Criminals will always migrate to the lowest point of resistance and it is only a matter of time until fraud will occur in merchants that do not migrate to EMV.”
Rohan Mani, reseller division director at Harbortouch, says, “Security is the primary reason why EMV is so critical. EMV credit cards include an embedded chip that provides robust security features and other safeguards not possible with traditional magnetic stripe cards …. Any businesses that don’t implement compliant equipment will leave themselves open to these costly data breaches and fraud that EMV helps protect against.”
A Realistic View Of ROI.
Some vendors are offering Solution-as-a-Service (SaaS) programs for the dealer channel at no up-front cost, which helps with the ROI for upgrades. McInerney admits ROI can be a difficult question to assess: “A merchant needs to evaluate how much of counterfeit fraud they can possibly afford once the liability shift takes place. Right now, merchants are not seeing those counterfeit transactions since the issuers are taking the loss. If one counterfeit transaction is the cost to upgrade to an EMV terminal, the ROI is simple.”
Impact On Consumer Confidence
Many customers will assume that they should be able to use their new chip-and-pin cards the same way across all merchants, according to McInerney. “The idea that a merchant has not upgraded to EMV will make customers feel that the merchant is using outdated or less secure technology,” which could damage consumer confidence in that business. It is likely that customers will avoid shopping at locations that cannot process chip and chip transactions. Al Duggan comments, “Merchants not making the transition to EMV will become primary targets for data theft,” leaving them open for decreased consumer confidence as well.