EMV Compliance in 2022: Why is it Important for Your Business
EMV compliance is one of the most important changes in the way businesses pay their bills. Despite the pressure to comply, many companies have not been able to make the transition.
If you are looking to reduce nuisances, EMV solutions may be something to consider. Many shops will still be watching the industry’s repercussions before they change their systems.
What’s EMV?
EMV stands to represent “Europay MasterCard and Visa”, the three major corporations that developed the technology. These are standard chip cards that can be used to make monetary transactions.
EMV cards have embedded microchips that store information and authenticate transactions, rather than traditional magnetic stripse.
Users need to input a pin code in order to verify purchases made in person. This, along with other technological advancements, makes chip card technology so efficient in reducing card fraud.
Many countries, including the United States of America, are yet to adopt EMV and move from magnetic strips to chips cards despite the increasing threat of fraud transactions.
EMV cards are not required for shops, but failure to accept them could lead to costly chargebacks.
What makes EMV safe?
EMV chips can save you payment information such as a magnetic stripe, when you make a purchase. Chip cards are more secure than magnetic stripe payment cards and have more data storage.
The microchip also encrypts all data. The encryption is encrypted to prevent identity theft. This can only be done if the POS terminal where the card is used has the ability to read and interact with the embedded microchip.
What is the function of this code? Each time a card has been used, it generates a “token” (code).
Payment tokenization is the process of exchanging potentially hazardous data points (such as credit card numbers) for an encrypted token (a token). This token is sent over the internet and replaces the credit card number.
To reduce the risk of online financial transactions, payment tokenization was created. This allows stores to offer safe and simple digital checkout without compromising safety.
EMV Payment Transactions & Their Classifications
EMV technology allows multiple tokens to be issued that can be used with different devices. Tokens can be used for online purchases, in-store transactions, and in-app purchases.
Card purchases
The majority of POS systems and payment terminals accept chip-based cards.
Because customers must enter a PIN code in order to verify transactions, this method of payment processing is more secure than other methods.
EMV cards are less susceptible to fraud because they can’t be “swiped” and cannot be used without permission.
Contactless Technology Making Payments
EMV cards allow for contactless “tappable”, payments, which are becoming increasingly popular.
The volume of contactless payments has increased by 150% in the last two years, and is expected to rise at a double-digit pace throughout the decade.
There are more contactless payment cases than ever before, including those for retail payments and ticket sales for public transport.
Card-Not-Present Payments
Card-not-present transactions (CNP) do not require physical cards. NFC transactions can be used to make mobile wallets, online payments, and in-app purchases.
EMV development involves additional security measures such as SMS authentication, in-app validation and push notifications in order to ensure the highest level possible of safety.
Why are EMV Solutions so Important when Electronic Payments are Being Made?
There are fewer fraudulent transactions and chargebacks. You can also accept mobile payments. EVM’s main advantage is its ability to reduce fraud. However, others have raised concerns about whether this shifts the focus from criminals.
Fraud Losses
As we have discussed, EMV technology is great at preventing fraud in person. It is difficult for counterfeiters to duplicate the secure chip technology on each card.
Even if the card is stolen, it’s very difficult to use stolen cards without the correct pin. EMV technology has significantly reduced in-person fraud. It isn’t always possible.
EMV is not perfect. Cardholders and retailers remain vulnerable to fraud. This is especially true as more online sales take place.
EMV solutions can
1. It is more difficult for cardholders to make duplicate cards.
2. You can reduce the chance of your card being stolen in person.
3. All user information must be secured on servers and terminals.
4. Assist with the detection of lost or counterfeit cards.
EMV solutions cannot
1. You can reduce the chances of fraudulently using your credit card information online.
2. Stop hackers accessing your wifi to steal your data.
3. Protect sensitive customer information from hackers by storing it in merchant databases
4. When shopping online, make sure you use a trusted payment method.
Reduction in chargebacks
Chargebacks are a part of business in the age of ecommerce. Customers can’t physically inspect a product before they make a purchase to ensure its quality and fit.
Chargebacks, whether online or in-store, can be detrimental to your business. It can be difficult to switch merchant service providers if there are too many chargebacks.
This can have a serious impact on your bottom line. Protecting yourself against chargebacks if your brick-and-mortar store accepts only EMV-compliant credit cards is easier.
Accepting contactless payment
Although contactless cards are becoming more popular in other countries, the spread of them in America has been slower.
However, contactless payments have seen a rapid rise due to widespread adoption of chip cards over the past few years.
In 2016, it was predicted that mobile payments would grow by 210 percent and that 70 million Americans would use mobile payment services by 2019.
These rising numbers suggest that it could be possible for your company to benefit from EMV compliance technology and accept contactless payments.
Conclusion
Companies can enjoy many benefits from quickly switching to EMV-compliant terminals. It is imperative to take action to reduce fraud costs in the retail sector. This will increase your profitability and reduce chargebacks.