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A weekly look at Wyoming business questions from the Wyoming Small Business Development Center (WSBDC), part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.
By Michael Lambert, Wyoming Market Research Center manager
“Do changes in the way credit and debit cards work mean changes for my business?” Celia, Sundance
U.S. banks are changing the working portion of your customers’ credit cards. They are adding something called EMV (Europay, MasterCard and Visa) technology to every credit card. Basically, they are adding a computer chip to all credit cards that makes them much more difficult to counterfeit.
If you’ve received a new card lately, you might see a small gold circuit on the front. This is the EMV chip; Europeans have been using this technology for years. One of our staffers was recently in Europe and came face to face with the technology. When in France, she found that the unattended automated gas station would not accept her U.S. card. Later in the trip, she discovered that many merchants kept their old readers around so that they could sell to American tourists.
This could be you. The timeline has already started, and the impacts on your business could mean that if you do not switch to the new readers, you may assume liability for any fraudulent purchases. By October 2015, the liability shift will occur, with the card issuers moving liability for fraudulent purchases to the processors.
In the case of Visa, next October, the party who is responsible for a chip transaction not occurring will assume the liability for any fraudulent purchases. MasterCard, on that date, will relieve merchants of liability if 95 percent of all transactions occur from EMV-compliant terminals. American Express will transfer liability to the party that has the least secure form of EMV technology, and Discover will follow a similar course to American Express.
Bottom line: If you haven’t put EMV terminals in place in your business by October 2015, you could be on the hook for fraudulent credit card purchases. The main card companies, banks and processors will likely be ready.
Now is the time for you to talk to your processor and to find what your cost will be to change out terminals. Bloomberg Business Week indicated in an article last April that the cost per terminal could be $500-$1,000. However, there are likely to be other solutions out there. Square and other vendors are promising cheaper solutions, but you need to start checking on your options as soon as possible.
Have you made the switch to EMV yet? What was your experience?
A blog version of this article and an opportunity to post comments are available at http://wyen.biz/blog1/.
The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, email email@example.com or write 1000 E. University Ave., Dept. 3922, Laramie, WY, 82071-3922.