Partner content provided by Bank of America Merchant Services
The excerpt below is from a recent white paper published by Bank of America Merchant Services titled, “How to Prepare for EMV.” To learn more about EMV, view and download the full report, or contact a Bank of America Merchant Services business consultant.
Does my business serve international customers?
Approximately 75 percent1 of all Western European cardholders have EMV cards, and the figure is even higher for Canadian consumers. In the absence of the liability shift, more international banks are declining to authorize transactions, thereby preventing sales. With the liability shift, an effective way to help minimize fraud risk and ensure payment for the sale is to properly accept EMV cards.
Does my business serve the travel and entertainment industry?
More travel-oriented cards, including corporate travel and entertainment cards, are being issued with EMV chips in the United States to enable their use abroad. To the extent those cards are also used in the United States, merchants will have a higher risk of fraud in the event the cards are compromised. And as we saw with international customers, the best way to ensure payment for a sale is to properly accept EMV cards.
Do I sell merchandise that is desirable to criminals?
Banks have historically analyzed each merchant category for the possibility that a cardholder may later dispute the charge for fraud reasons (so-called “high-risk merchants”). As banks issue EMV cards, the burden of any of these disputes may fall more on merchants. Whereas merchants had come to rely on the bank’s authorization of a transaction, after the EMV liability shift, the bank has a reduced incentive to monitor for potential counterfeit fraud where a chip card is presented to a merchant who is not EMV-enabled. Even if a merchant has scant exposure to fraud today, fraud rings may seek out non-EMV merchants.
Will I be perceived as “less secure” if I don’t accept EMV?
In the wake of several high-profile data breaches, some banks reissued cards even in the absence of any detected fraud.13 Consumer perceptions of what constitutes secure commerce are important, and if consumers grow to accept that reading a chip is more secure than swiping the magnetic stripe, retailers should be prepared to respond to this consumer preference.
So, if the answer to any of these is “Yes,” then we maintain that accepting EMV payments will be a necessary cost of doing business. If the answer to all of them is “No,” then you should review the questions as market or business conditions for the payments landscape change, and consider other facts and circumstances that may be specific to your business.