Caution: This is not your typical article touting why you should rush out and implement an EMV solution prior to October 1st of this year. First EMV is not Y2k. Note that the world will not come to a screeching halt if you do not have EMV in place by October. There is no doubt there is a lot of media, banks and sales pressure on many merchants to upgrade their terminals to EMV capable machines, but there is an element of hype to avoid. For this reason, we have put together the top 7 reasons NOT to adopt EMV:
- You only accept transactions in a Card Not Present (CNP) environment
In web based transactions and mail order/telephone order (MOTO) transactions, where the physical card is not present, the need for upgrading to EMV is moot. The EMV Chargeback Liability Shift only pertains to card present transactions, since the technology is in the chip embedded in the card. With EMV cards, every time a transaction happens, the chip creates a unique code that never gets used again – but only if the chip reader is used in a card present scenario. If you never use a card present machine to process orders, then EMV adoption is not necessary at the moment.
- The cost to support EMV is greater than chargeback risk
If your customers don’t typically dispute for fraudulent reasons, and your chargeback risk is extremely low, even if you do a good number of face-to-face transactions, the cost of upgrading your POS equipment may outweigh the costs incurred with chargebacks. A very low risk that you are willing to take.
- You know your customer base
Some merchants know their customer base very well. Perhaps they have many repeat customers, or a small customer base. Perhaps credit card usage is limited to just a handful of business clients who they have had a relationship with for many years. In this case, chargebacks have not been a concern and for the foreseeable future will not be a concern, and a migration to EMV terminals is not deemed necessary. If you do not know them, ask for a form of identification if you feel any possible risk. Problem solved.
- Issuing banks are slow to roll out EMV chip cards
With less than 1/3rd of US cards being chip enabled, customers aren't demanding, nor are they able, to make their transactions via EMV terminals yet. While this may be a reason to delay the adoption of EMV for some merchants, banks are ramping up their EMV issued card shipments, and these numbers will continue to rise. This can be seen as a reason to perhaps delay EMV adoption, but certainly not a longstanding reason to never adopt.
- The product or service you sell is not in high demand by fraudsters (unlike consumer electronic equipment)
If you cannot fathom a fraudster trying to resell your products to other criminals, your risks are pretty low. Only you can ascertain those risks.
- Upgrading involves a costly integration with your Point of Sale solution
It might make sense to wait and adopt an additional "know your cardholder" procedure (such as checking identification or asking for the card to verify the last 4 digits) until you make the investment .
- You operate in a hybrid environment with both card present and CNP transaction, but those that are card present are on low ticket items where chargebacks are not a huge concern.
So even if you do have card present transactions, the majority of your sales are Card Not Present, and the items you are selling in person (at trade shows or events for example) are on lower ticket items.
Still have questions or concerns about the EMV Chargeback Liability shift? Download our EMV eGuide for more information.