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Do I Need An EMV Chip Terminal for my Small Business?

Last summer a there was a big question being asked of merchant services providers by small businesses. What is EMV and why does a business need a special EMV (EuroPay MasterCard Visa) chip terminal? emv merchant account terminal

The EMV shift has been in the news for the past several years, but even up to the deadline of October 2015, it still seemed to be a big surprise for many businesses in the U.S.

Now that the EMV liability shift deadline of has passed and the hype has slightly settled, many small retail businesses are still slow to transition to the use of EMV smart chip terminals with their merchant accounts.

Some even question whether or not they need an EMV chip terminal and wonder why they are being forced to purchase new equipment and adopt new procedures. Wasn’t the old system working just fine?

Yes and no. The practice of swiping credit cards through a magnetic strip reading device dates back to the 1970’s. Newer technology paired with old strip reading technology has led to many improvements, including faster transaction processing.

But the fact is, magnetic strips store and transmit credit card data statically or without encryption. This makes it much easier for thieves to capture credit card data and use it to make fraudulent transactions.

EMV terminals read a credit card’s smart chip, not the magnetic strip. Smart chip data is encrypted before being transmitted, making it impossible to decipher if it was somehow retrieved by a would-be thief.

The use of EMV technology in the U.S. will help to curb the ever-growing number of security breaches, saving businesses billions of dollars annually. So, it’s for good reason, the major credit card associations have pushed for the migration to this more secure technology in the U.S.

As many others do, you may be thinking, ‘Do I need an EMV chip terminal for my small business?’

There is not any sort of legal requirement for businesses to migrate. The major card associations say that businesses that fail to implement EMV technology may be held financially liable in the event of a security breach. But, they have not imposed penalties for failing to use EMV, nor have they provided any incentives such as lower rates to those that have implemented EMV technology.

So, the simple answer to questions of whether or not a business really needs to accept EMV transactions through an EMV terminal is… No.

As 2015 rolls into 2016, business can continue to swipe customer credit cards using antiquated magnetic strip technology. But, all businesses should understand that EMV is here to stay. And sooner or later businesses that are non-compliant run the risk of getting burned.

Small businesses that have not yet migrated to EMV would be wise to start thinking that way, and plan to fully adopt sometime in 2016. After all, EMV not only protects a merchant from a financial blow, but also protects its customers from potential identity theft.

Transitioning to EMV is easy less expensive than many people think. At The Transaction Group, we specialize in assisting businesses with merchant services. If you have questions about EMV or are looking to get your small business set up with EMV smart card terminals, give us a call at 888-383-8056.