EMV Credit Cards and Retail Security
A seismic shift took place in the US retail space in October 2015. Credit card-issuing banks transferred their liability for fraudulent transactions to merchants if those retailers didn’t accept EMV (chip and PIN) credit cards. In spite of their new obligation, only 37% of US merchant locations can accept these credit cards. Read on to learn more about why EMV cards are safer than traditional magnetic stripe cards, and what’s keeping US retailers from adopting them.
Are You Behind the Times?
The abbreviation “EMV” stands for “Europay, MasterCard, and Visa.” Those three companies developed the technology behind EMV credit cards.
The EMV Advantage
EMV credit cards contain a microprocessor chip. Every time a customer makes a purchase with an EMV card, the microprocessor chip generates a unique code that can’t be traced back to the credit card (or the credit cardholder). Let’s say a hacker infiltrates a retailer’s POS system. He or she can’t do anything with the unique code, because it only worked for that transaction. And the hacker can’t figure out who owns the EMV card.
In contrast, the magnetic stripe on a traditional credit card transmits a customer’s credit card number every time he or she swipes it. That number is static, so if a hacker breaks into a POS system, he or she can not only use that credit card repeatedly for fraudulent transactions, but he or she can determine who owns the card and commit identity theft.
Why Haven’t More US Merchants Adopted EMV Technology?
If EMV credit cards are so much safer than the magnetic swipe variety, why do only 37% of US merchant locations accept them? It doesn’t make sense, especially because retailers will now be liable for fraudulent transactions as a result of not accepting EMV cards.
There are a few reasons that US merchants have been slow to adopt EMV technology. Firstly, in order to process EMV credit card transactions, retailers need card readers that accept EMV cards. They don’t want to invest in new card readers when plenty of people still use magnetic swipe cards. As a result, credit card issuers are hesitant to issue EMV cards if there aren’t enough merchants to process them.
In addition, smaller credit card issuers decided that they’d rather let their larger competitors take the lead in this situation. They believed it would be better if their customers learned about these cards from other companies first, so they wouldn’t have to deal with the inevitable questions about why customers were receiving new cards and how to use them.
Industry experts believe that EMV technology adoption rates will rise, once consumers express greater preference for these cards, and retailers begin paying for fraudulent transactions.
Power Pay Payment Processors: Helping You Adapt to EMV Technology
Want to accept EMV credit card payments for your (and your customers’) security? Power Pay Payment Processors offers the latest credit card readers at affordable prices. Call us today at 1-800-483-8815 to learn more.