Mark October 1st on your calendar and do something about it today, and no, we don’t mean finalize your Halloween costume, though ignoring this deadline could be very scary. October 1st is the deadline to switch your credit card terminals to accept EMV (Europay, MasterCard, Visa) chip based cards.
We all remember the recent data breaches that occurred at such giants as Target and Home Depot. The theft of customer credit card information cost Target over $160 million and Home Depot over $60 million. Hundreds of millions of credit cards had to be replaced, costing banks tens of millions of dollars in just replacing cards, let alone the tens of millions in losses to fraudulent credit card purchases. Enough was enough and the credit card companies are finally updating their systems in 2015 to help thwart of mass credit card fraud seen over the last couple of years.
The credit cards we are all used to, have a magnetic stripe on the back that contains all your credit card information. That information is not encrypted and worse still, never changes. Clone the information on that strip and you can clone that card a hundred times over making purchases online and around the world until caught.
New EMV chip embedded cards will start to be issued soon. These new cards contain a chip that will be used to create a unique transaction code every time the card is used. That code is written to the chip, meaning the code may only be used once, making a stolen card virtually useless. Will this eliminate credit card fraud entirely? NO, but it will dramatically cut it down. Over half the credit card fraud worldwide occurs in the US, due to our reluctance to evolve with the times. The banks however are getting tired of absorbing the massive costs of data breaches and are instituting this new EMV protocol. EMV technology has been in use in Europe since the mid 90’s.
Starting October 1st, any EMV card presented to you for payment must be processed via an EMV device. If there is a loss due to not using an EMV device, that loss and subsequent data breach costs will be borne by you the ECP, and not the bank. Let me emphasize this. After October 1st, if you do not process an EMV card though an EMV terminal and there is a breach because of that, you are responsible not only for the cost of that transaction, but for all charges made due to that breach.
So, to save yourself, your company, and your sanity, you will need to get EMV enabled card readers from your credit card processor, which can cost from $200 to $1000 per unit. You might opt for a more expensive unit that can process Apple Pay or Samsung Pay through NFC as we have previously discussed, or something simple depending upon your practice.
Here is a short video from ThatsEMV explaining the new system.
Daniel Feldman, is CEO of dba designs & communications a marketing firm and a co-founder to the Visionaries Group, an optical consulting firm specializing in helping eye care practices achieve success.