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Small businesses get on board with EMV

Chip cards on the rise

Martin Desmarais
Small businesses get on board with EMV
Customer-facing point of sale EMV terminals, such as those by Verifone are one secure option for chip-card enabled credit cards. (Photo: Photo: Courtesy of Verifone)

The EMV revolution is here and small businesses that do any kind of retail transactions had better not ignore the winds of change it brings. Simply put, “EMV” is the migration of the retail world from magnetic strip credit cards to cards with a microprocessor or smart chip that interacts with point of sale systems to validate the card and transactions, and also requires the use of a consumer pin number to finalize the sale.

Author: Photo: Courtesy of IngenicoCountertop point of sale terminals, such as the Ingenico iCT250, that handle EMV or chip card transactions are a fast necessity for any small business with retail sales.

The acronym derives from the partnership between three companies — Europy, MasterCard and Visa — that first developed the standard for using chip cards. This coalition has since expanded to include payment companies such as American Express, JCB and Discover. But the EMV moniker stuck.

While the payment world, between mobile payments, online payments and any number of trendy tech gadgets to collect consumer money, has plenty of ever-changing ways to close the sale, EMV is not likely to go away any time soon. In fact, the migration toward EMV has been many years in the process with 2016 targeted as the first full year of mass usage.

Though this has not entirely played out as dreamed — according to a recent report from, only 25 percent of U.S. debit cards currently have chips and about 12 million point of sale terminals still have not been upgrade to EMV — the EMV numbers are still significant.

Visa released data this spring that found an average of 23,000 new retailers are upgrading to EMV each week since late 2015. The data also suggested that chip-card transactions are increasing over 12 percent a month and now top more than $20 billion monthly.

Visa, alone, has issued close to 300 million chip cards in the U.S. The credit card giant also reported that 1.1 million retail locations are chip-enabled now and that more than three-quarters of chip-enable retail stores are small-to-medium-sized businesses.

There is a good reason that so many small businesses are getting on board with EMV — and should be doing so: namely, an October 2015 government-mandated requirement shifted liability on fraudulent transactions processed without chip-enabled terminals to the businesses that fail to do so. In the past, credit card issuers faced most of the liability for fraud. Now, small businesses without EMV are left holding the bag. And with approximately $8 billion fraudulent card purchases in the U.S. a year and rising, the financial repercussion on small businesses is crushing to those still using the old swipe and sign method of card sales.

Security and protection

Ultimately, the crux of EMV is about security. Counterfeiting is much more difficult with chip cards than with magnetic strip cards. Also, because of the use of a pin with chip cards, stolen credit card data — the bane of any retailer — is much more difficult to use.

EMV protects retailers, card issuers and consumers so the front line of the battle becomes the point of sale transaction and not servers of credit-card data hiding from hackers behind layers of security technology. As of now, chip technology is almost impossible to duplicate; EMV cryptogram ability blocks sensitive data from cyber thieves as well.

For any small business owner, protecting the security of your business and the security of your customers should really be priority number one. But aside from that, consumer demand will make EMV migration a necessity.

A new study by Vantiv and Socratic Technologies showed that consumer opinion is swinging in the way of chip cards, with 76 percent of those surveyed saying they believe chip cards are more secure and close to half of them also saying they are more convenient to use versus traditional credit cards.

No matter how you look at it, the jury is out on EMV and chip cards — small businesses need to make the switch because it’s all reward for doing so and all risk for not.