By Michael Gavin
Cayan
It's hard to believe we're only two short months away from the liability shift and the transition to the Europay, MasterCard and Visa (EMV) protocol. Although EMV has been talked about for the last few years, the majority of U.S. businesses are unprepared.
According to a recent study by Javelin Strategy & Research, only 25 percent of merchants have EMV-capable equipment and the majority of them are large retailers. It's the small to midsize businesses (SMBs) that are uninformed about EMV, the liability shift and the financial consequences they could face by being noncompliant.
While it may be shocking to see these statistics, there are several reasons why SMBs haven't upgraded yet. Some are unaware entirely and have never heard of the acronym EMV. Some may view EMV equipment as too costly. Though it may seem expensive and a headache to switch equipment, businesses will be better off purchasing new equipment now rather than face the financial effects of a fraudulent transaction.
Some small businesses may be educated on EMV but may not see the true value and benefit of making the upgrade. A few businesses may even think a fraudulent transaction won't occur at their locations and are willing to take the risk. It's scary to think of all the unaware and uneducated merchants out there – what can be done?
As a payment professional, it's up to you to educate your customers on the importance of EMV and the critical liability shift. For those in the payments industry, EMV is a well-known and common topic, but businesses may not be aware. Your customers rely on you and consider you their trusted, go-to resource for anything payments related.
When you're speaking with your current customers and prospects, give them a brief overview of the transition to EMV, including the reason why the United States is making the shift and the benefits of having EMV-capable equipment. Chip cards are a sophisticated technology that merchants need to be aware of, but the key piece to focus on with your customers is the liability shift.
Beginning Oct. 1, 2015, the liability shift will go into effect, meaning if a fraudulent transaction occurs, the party responsible (the merchant or the issuer) for an EMV transaction not occurring will be financially liable. This will have a major impact on all businesses, and having that liability should convince your merchants to upgrade their processing equipment.
Consumers are already receiving chip-embedded debit and credit cards in the mail from their issuers. This is a new payment method, so it will take some time for consumers to fully adjust to the new process of inserting rather than swiping their cards, but it will eventually become the norm in the United States. Soon enough, consumers will realize the security benefits and will prefer to use chip cards to pay.
In the future, we'll likely see some consumers hesitate to purchase items from merchants without EMV card readers. Make sure your customers are aware they could eventually risk losing customers if they are not processing on EMV-capable equipment.
Another often overlooked benefit of upgrading to EMV-capable equipment is that the majority of new terminals and POS systems have built-in NFC capabilities, meaning businesses can accept mobile payments. With more mobile payment options on the market now, including Apple Pay and Android Pay, mobile payments will eventually become a preferred payment method, so that's just another reason to make the upgrade.
EMV has its benefits for both merchants and consumers, but what's in it for you? EMV gives you a reason to revisit and reconnect with your customers. It's a great excuse to check in, educate them on EMV and even offer additional services. Consider your portfolio of offerings, such as value-added services, that can expand and contribute to their business success. EMV also gives you the opportunity to earn additional revenue when your customers purchase the new EMV-enabled equipment.
Although 75 percent of merchants most likely won't meet the October 2015 deadline, educating your customers is one critical step that will help with the overall EMV initiative in the United States. It will also help you increase retention, strengthen relationships and build a reputation as an industry expert. Now is the perfect time to capitalize on EMV and help your customers protect their businesses.
As Cayan's Senior Vice President, Sales, Michael Gavin is responsible for day-to-day management of the company's direct sales efforts including organizational structure, sales forecasts and overall strategies. He also oversees all sales activities within the company's agent channel, a growing network of more than 400 independent representatives throughout the United States. Michael has served as a key leader within the organization since joining the company in late 2000. An individual who has made numerous key contributions, Michael was the architect behind the design and development of the agent channel. Michael is a graduate of Merrimack College where he earned his Bachelor of Arts degree in Political Science. Contact him at mgavin@cayan.com.
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