Why You Need an EMV Terminal in 2016.

Now that we’re well past the EMV liability shift of October 2015, perhaps you’ve seen an increase of chip cards handed across your counter when it comes time for payment. Although EMV adoption is not required, your business has much to gain and much to lose from your decision to adopt – or not to adopt – an updated EMV terminal this year.

Employing an embedded data chip, these “smartcards” protect sensitive cardholder information better than traditional swiped magstripe cards. Although chip cards can be swiped, they have extra security advantages when processed by an EMV chip-enabled terminal. As the global standard for the authentication of chip-based credit cards, EMV is your shield against most cases of card-present fraud.

After the shift deadline of October 1, 2015, merchants who do not use a chip card reader to process card-present transactions when a chip card is present can be held liable for any fraud that occurs as a result. Swiping any chip card rather than using an EMV capable reader puts your business at risk.

The credit card industry has been paving the way for EMV to become the standard in credit card processing for several years. Despite the initial slow adoption, a wave of chip cards is coming. In fact, the Pulse 2015 Debit Issuer Survey found that 73 percent of cards in the U.S. will have EMV chips by the end of 2016 and will reach 96 percent by the end of 2017.

The main advantage to EMV cards is that they will cut down on counterfeiting, which accounts for 37 percent of all U.S. credit card fraud, according to a 2014 report by Aite Group. EMV technology increases card data security by making it virtually impossible to create counterfeit cards and by requiring cardholder authentication with a signature or PIN that verifies that the card belongs to the person using it.

As the U.S. continues to follow the lead of other EMV adopting countries, it can forecast a significant drop in card-present fraud, as has occurred in those countries taking similar card security measures. However, as of 2013, 99.9 percent of terminals in Europe were chip-enabled and 84.7 percent of terminals in Canada, Latin America, and the Caribbean were updated to accept chip card transactions. Until the U.S. becomes fully compliant, global fraudsters may shift their focus and strategies to target the currently semi-unprotected U.S.

If your business is still vulnerable to card-present fraud, updating your system this year might prove to be a decision that could save your business down the road. The revenue lost due to data breaches and fraud is now reported to be up one-third from 2013. Upgrading can be costly, yes, but without an updated EMV terminal, the price of not upgrading could be a cost that cripples your business.

So what’s the next step? If you want to steer clear of most cases of card-present fraud liability, you’ll need to implement an EMV capable card reader that can interface properly with your POS system. If your POS system is incompatible with EMV technology and can’t be updated, you may need to upgrade your system. Because there are also interface and integration procedures to be considered, adding EMV acceptance is best done in partnership with your POS provider.

As you consider your EMV terminal options, it’s important to weigh all of your options. Keep in mind, you don’t have to comply with EMV standards, and you’re under no obligation to gain the security benefits that protect you against counterfeit fraud and safeguard your customers’ information.

But that’s just what the fraudsters are counting on.