Follow the news and it’s easy to see that payment fraud has become the largest theft-related threat facing business and consumers in the United States, as well as around the world. The cost of payment card fraud grew by 19 percent globally in 2013, hitting $14 billion, according to research from BI Intelligence. The threat is higher in the United States, where payment card fraud grew 29 percent to $7.1 billion.
So why is payment card fraud more likely here at home than around the world? One of the largest reasons is because the country has fallen behind in combating payment card fraud through technology. About a quarter of the world’s payment card transactions are done in the U.S., but more than half of payment card fraud happens here because the United States is the only developed country that does not yet have wide-spread use of EMV chip technology.
EMV stands for Europay, MasterCard and Visa, and EMV cards use a computer chip embedded in the card itself to create a unique transaction code for every purchase. This makes counterfeiting attempts much more difficult.
Many U.S. businesses have been reluctant to implement EMV technology because of the added expense and time required to transition. However, this transition should not be put off any longer. Effective in October, liability for all payment card fraud will shift to the party who did the least to prevent the fraud, putting the burden on the businesses themselves.
If your business is looking to improve its security and implement EMV technology before October, follow these tips to make the process as smooth as possible:
* Find the time that works for you. You’ve heard the saying “timing is everything,” and this applies to your acceptance of EMV chip technology as well. Adopt EMV too soon and you could face additional costs as PIN debit networks add EMV standards. Adopting it too late, however, could cause you to face liability shift expenses.
* Make your updates all-inclusive. Making the transition to accepting EMV technology is a great time to ensure you can accept emerging forms of payment as well. So when you add EMV, don’t forget to consider upgrades such as tokenization and contactless payments. Chase provides a point of sale terminal called Future Proof that accepts EMV chip cards, as well as mobile Near Field Communication (NFC) and other forms of contactless payment all in one streamlined device.
* Be ready for other threats. Research shows that businesses that accept EMV technology saw a reduction in counterfeit fraud (fraud that results when fraudsters steal card data at point of sale to create and use counterfeit plastics) while cases of electronic fraud (fraud that results when fraudsters steal data and use it for online purchases) increased. As you shore up your brick and mortar protection, make sure your website’s fraud detection technology is updated and ready for increased threats.
* Don’t forget about this… Making payments with chip readers is slightly different from conventional readers, and not all chip readers look alike. Customers need to insert their card in the reader and keep it there until the transaction is complete. Make sure your front line employees can help customers through the transition. It’ll make the transaction smoother and ensure that customers get the great customer service you’re known for.
Transitioning to EMV technology may seem confusing at first, but with liability for all fraudulent transactions shifting in October, your business simply cannot afford the risk. To learn more about how to install EMV technology and protect your business, contact Chase today or visit them on Twitter.