Starting October 1st, credit card companies will begin to harness the power of technology in an effort to reduce credit card fraud in the United States.
Already, credit cards throughout the nation have been upgraded with EMV chips. You may have already seen one, or may have one in your possession. EMV chips work by replacing magnetic strips and ensuring that whomever is holding the card is the card owner.
While extremely beneficial for consumers, American retailers who fail to remain up to date with this technology could suffer the repercussions. Below, we examine the effects EMV chips will have on businesses.
In 2008, the United Kingdom adopted the use of EMV chips and has since seen a major decrease in fraud and identity theft. Magnetic strips have been outdated for some time, but different costs along the way have prevented the United States from staying up to date in credit card technology for some time. By adapting EMV chips in America, credit card technology will finally match up with the always-increasing computer technology we have. Consumers can finally breathe a small sigh of relief each time they make a transaction: their money and identity will soon be much safer.
Retailers, however, have some major reason to worry. Failure to purchase the terminals necessary to read these chips makes a business vulnerable to credit card fraud costs. Banks will no longer be liable. Without these new terminals, your business can not offer the advanced security of EMV chips, making you the weakest link in the security chain, and ultimately the sole entity responsible for paying the costs of fraud.
Cost: Time and Money
Fortunately, if a business has adopted the new EMV technology by October 1, 2015, fraud is made nearly impossible. This change will benefit consumers and businesses alike with a newfound feeling of safety in regards to money.
The negative? These terminals will cost your business a pretty penny, and a decent chunk of your time. EMV terminals run around $400-$500 in cost, but advanced terminals are predicted to cost somewhere in the thousands. Not only that, but transaction time with your customers will increase, as the scanning of chips takes longer to process.
Remember though, the advantages of avoiding fraud liability – potentially forever – greatly exceeds any short-term costs your business might endure.
Attorneys across the country are anticipating a high demand for help on this upcoming change. New parties will be acquiring the responsibility of fraud charges as banks step back. If your company is ill-prepared for these changes, due to lack of knowledge or funds, you could be subject to major financial damages.
Credit card fraud is a serious issue finally being addressed, but your business needs to be prepared. Adapt to new technology before it’s too late.
Need legal assistance? Contact Wolfe, Jones, Wolfe, Hancock, Daniel & South, LLC today.