Worried About the New Credit Card Changes? EMV Compliance May be Simpler Than You Think

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If there’s one thing in this world you can count on, it’s the fact that nothing lasts forever. Even the most common things are subject to change — including the way businesses run customer credit cards. It’s something we do every day as consumers and business owners. But starting October 2015, if you’re not following new regulations for credit card processing, your automotive business could be subject to a serious liability problem.

Why the new rules for credit cards and business owners? The answer is simple: to cut down on the credit card fraud and data breaches that have become rampant in the United States.

You probably have experienced the first wave of this credit card sea change already on a personal level, especially if you have received a new credit card from your bank in the past month or two. U.S. banking institutions have already begun their shift to incorporating computer chips in their credit cards, all with the goal of protecting customer data and making it harder for thieves to steal your personal financial information.

The new chips utilize what is known as EMV technology (EMV is short for Europay, MasterCard and Visa, all widely accepted forms of credit in Europe and the U.S.). EMV is now the global standard for electronic card transactions and is already commonly used in Europe and Canada. U.S. businesses are playing catch up, and they’re doing it fast.

The benefits of using EMV are too hard to ignore — and businesses of all sizes need to be aware of what EMV offers, as well as what it requires. First, the benefits. EMV is all about embedding modern credit cards with a tiny computer chip that allows the credit card to produce a unique, one-time code each time it is run through a credit card machine.

The way EMV technology works is easy to understand with a simple analogy, according to Ricardo Colon, president of PM Attendant, one of the well-known point-of-sale companies in the automotive field.

“It’s like opening your garage door with a garage door opener,” Colon said. “The signal changes so no one can steal it. The chip (in the credit card) does the same thing.”

In other words, the card’s PIN — which is the most vital piece of information for making a fake credit card — can’t be stolen through the new EMV technology. Unlike the older magnetic-stripe technology, which could only produce one code for the life of the card, EMV chips are extremely difficult — nearly impossible — to counterfeit. The kind of data skimming frauds that have plagued consumers, businesses and banks for years will be nearly eliminated by this new technology.

For automotive businesses, the biggest concern around the EMV switchover is how to comply with the switchover when their customers pull out a new, chipped credit card. To scan the chip properly, businesses will need a special EMV card terminal. As you can imagine, many business owners have questions about what to do, how to do it and how not to spend an arm and a leg while doing it.

The good news is with this big a change, there is plenty of information out there for small business owners to take advantage of. Companies like PM Attendant, for example, are offering webinars, emails and other training materials for their customers. With a little research, business owners can learn how easy it can be for them to comply with the new EMV regulations.

The main thing automotive businesses will need is new equipment; the EMV-chipped credit cards must be inserted deep enough into a scanner so their chip can be read, which doesn’t happen on the old magnetic-strip readers. So, any business accepting credit cards will need a new card terminal. Business owners shouldn’t notice major changes to the computer side of taking customer payments. All the heavy lifting is being done internally by the POS software and hardware companies.

Credit card processing companies and POS providers are working hard to get their hardware and software up to speed for EMV processing far ahead of the October deadline. In most cases, small automotive business owners will find the switchover on October 1 to be as easy as purchasing a new credit card scanner and plugging it in to their existing computer system.

Some businesses are undoubtedly concerned about the cost of EMV compliance, and with some justification. A new credit card terminal will cost around $500. But purchasing the technology and using it starting October 1, according to Kord Stockwell, senior account executive at World Pay, a leading credit card processing company.

“The cost of noncompliance is much higher than the cost of a new EMV terminal,” Stockwell said. “Businesses that fail to upgrade their systems to properly process EMV-chipped cards will become liable, starting in October, for the costs of any fraudulent purchases. In the past, that liability usually fell on the credit card’s issuing bank. Once the new regulations kick in, automotive businesses will take on that liability instead.”

A business using old equipment to process credit cards could end up liable for thousands of dollars in fraudulent credit card charges.

“In a sense, businesses who get defrauded will have to pay out of their pockets twice,” Stockwell said. “First, they will lose the actual goods they sold to the fraudster. On top of that, they’ll have to pay out the cost of those goods to the credit card owners who had their credit information stolen.”

By comparison, a mere $500 for a new piece of equipment is a bargain.

“This switchover is not a big deal if you use certified equipment,” Colon said.

The change to EMV terminals is expected to be easier than many business owners realize, as long as they are proactive about getting on board.

Colon assures everyone he speaks to, “This whole process will benefit you in the long run.”

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