With ever growing technology advancement and increasing large scale information breaches and fraud, it has become a real threat for small scale business owners not to use EMV technology. For the sake of their business and to keep vital information of their customers safe, they cannot but upgrade to EMV for the satisfaction of their clients.
EMV technology, named after its original developer Europay, Master Card, and Visa, is an upgraded and improved version of payment card technology, which contains a small, metallic square chip unlike the magnetic stripes on traditional debit and credit cards, which makes EMV cards more secure and impossible to hack.
“Upgrading to EMV technology is an important and crucial step forward,” says Julie Conory, the research director of retail banking at Aite Group. She also said that EMV cards are developed to improve payment security, which makes it more difficult for fraud to successfully be committed.
The reason for introducing EMV cards is that they are more secure against fraud and counterfeiting. These cards are pin protected. Customers have to enter their private pin number each time they make a debit payment. And each time a customer inserts an EMV embedded card for making a payment, the metallic chip on the card creates a unique code which is impossible to be used again and which cannot be duplicated, making the card fraud-free.
According to a 2016 report by Mastercard, after EMV embedded cards had been launched in the market, card fraud dropped by 60 percent amongst EMV-ready merchants.
Despite having a high-security advantage and no chance of fraud, many small businesses are less interested in upgrading their payment system to accept EMV cards. As most of the small businesses operate on a tight margin, one possible reason for the lack of interest may be, upgrading to a new system will cost thousands of dollars, and the staffs may need some time and training to operate the new upgraded system. Also, there may be many customers who haven’t changed their cards to EMV cards.
Major credit card issuers like MasterCard, Visa, and American Express had declared October 2015 as the deadline for small business to upgrade their existing payment system to EMV friendly systems. Since the deadline, the liability for in-store fraudulent charges shifted to the business owners (who haven’t upgraded the store’s payment system) from cardholders and banks. As the accusations of fraud have turned to small business owners, there is an enormous risk of ruining the business’ reputation.
After all the shifting of security issues, many small businesses are still not prepared to upgrade their system. According to a report by CAN capital, about 73 percent of small business owners confessed that their payment system was not EMV friendly and about 70 percent declared that they are not willing to upgrade their payment system in the near future.
The potential cost of delay to upgrade may be much higher than the small business owners think. Therefore, to save themselves from fraud and related charges and to achieve and hold their competitive advantage, small business owners should consider upgrading their payment system as early as possible.