Business Owners: What You Need to Know About Accepting Credit Cards after October 1st

posted Jon Parker 10/2/2015 in Banking

The Next Generation of Card Acceptance

What is EMV?

EMV is the technical term for a smart payment card, or a card with an embedded chip which may be inserted into a capable terminal for more secured payments than the traditional magnetic strip card. EMV itself stands for Europay, MasterCard, and Visa, the companies credited with initially creating the smart card standard. EMV and “Chip” cards are synonymous. Occasionally “Chip and Pin” terminology is utilized and implies that a PIN must be used in association with the card insertion.

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Why EMV?

Traditional Mag-Stripe cards contain two tracks of data which allow for the card to be processed when swiped. The information on Magstripe is easily counterfeited and replicated for issuing duplicate debit cards based on stolen information from physical skimming devices or from online data entry.

EMV cards house a physical chip which allows for secure and dynamic authentication which must be verified through the processor and issuer to verify authenticity of the card.

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What does the EMV deadline (10/1/15) really mean to businesses?

Despite what you may be hearing from various news sources, other merchant processing companies, or agents, it is not a requirement to accept EMV “Chip” credit cards by October. Traditional machines will still be able to accept cards just the same, including newly issued “chip” cards as well as traditional chip-less versions.

A theoretical liability shift from card issuers (banks) to merchants (business) is what has really occurred as of the first of October, however, much of the software allowing merchants to accept “Chip” cards is still being developed and refined across the country.

What does the liability shift mean to me?

In the traditional world of merchant processing, the merchants experience no liability of fraud. As long as they have obtained proof of an authorized transaction, this liability has been absorbed by the issuing institution of the card used fraudulently. As of October 1, 2015, if you are a merchant and accept payment via a chip-enabled card, but are not running an EMV enabled terminal, then any fraudulent liability “shifts” from the issuer of that card to the accepting merchant.

Am I at risk?

Only merchants with a high ticket retail location such as jewelry or electronics should be concerned at this time. Healthcare, businesses with largely repeat customers, and other lower average merchants are least likely to be targets of fraud.

Lincoln Savings Bank Merchant Customers

Any of our customers that are new to Lincoln Savings Bank merchant processing, or have received a replacement machine since November of 2014 should already have a EMV enabled machine. As soon as software updates are available for your machines, we will contact you and walk you through the process.

For our existing customers that do not have EMV capable machines, we will be contacting you in the next few months to swap out your machines with a model that is EMV capable, in addition to Apple Pay, Android Pay and Samsung Pay capable.

If you have concerns or questions, please contact a member of our LSBpro staff at (515) 777-7940.

If you wish to request an updated terminal sooner, please contact Merchant Support directly at 800-437-0712 ext. 5.

-Please note that you will need your merchant number (located on your machine) as well as the last 4 digits on the owner’s SSN or associated checking account number as verification when you call. 

Learn more about Lincoln Savings Bank's Merchant Services for accepting card payments!

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