EMV stands for Europay, MasterCard and Visa. What is it and how will it affect you and your business?
U.S. banks will be switching to this new type of credit card by October of 2015. All cards will be equipped with a super-small computer chip that is extremely hard to counterfeit. Europe already has this technology in use in an effort to combat fraud. According to current statistics, the U.S. is currently the capital of credit-card fraud. Here is a link explaining the vulnerability of the U.S. to credit fraud that may help you understand the advantage of the new computer chip technology vs. the old magnetic strip technology: – http://www.businessweek.com/articles/2013-12-23/why-the-u-dot-s-dot-leaves-its-credit-card-system-vulnerable-to-fraud
I have been reading and hearing a lot about this lately and thought it was important to let you to know to be on the lookout for what it is and how it will affect you. I will continue to update you as I discover more info about it, but today I would like to make you aware of what it is and what you should be looking out for over the next year, particularly in regards to how to fix your accounting.
So exactly, how will this affect your business? First, you will need a new processing device, and chances are it will not be free like the one you currently have. Second, come October 2015, businesses that do not have the new technology could be liable for all fraudulent transactions.
You know those financial newsletters that you trash? This may be a good time to start glancing at them, as they may be holding important information regarding how to upgrade to this new technology and the BIG issue: How much it will cost you!
I received my Square reader free when I opened my Square account. In fact, I received one free Square reader for each account I opened. I believe that the same is true for Intuit card reader and probably others. These card readers will become obsolete with the adoption of the new cards to the U.S., as there will be chip that needs to be “read” to help discourage credit card fraud. The cost for the new card readers has not yet been announced; however, I feel strongly that there will be a cost involved.
Here is an image of the change to the back and the inside of all U.S. credit cards that will take affect by October 2015. It appears as though the new cards will continue to have the magnetic stripe and the computer chip for at least the near future as the time and money necessary to convert all card readers everywhere will be quite a challenge for many businesses in their accounting systems.
The new technology will be “Dip the chip”, meaning that the chip cards are inserted or dipped into the reader and left in place for the entire sale as the reader and card talk back and forth.
All businesses that accept credit cards will need to adopt the new technology to accept the new computer chip that will be a part of all the new credit cards. In fact, if you have recently received any new credit cards, there is a good chance they are already equipped with the new chip!
It sounds rather daunting when you consider the millions of businesses that currently accept credit cards as a method of payment. This will affect everyone from the largest commercial outlets to the smallest mom-and-pop shops to the entrepreneurs at your local craft fair who have a card reader on their phone.
The Town Square has much more information available regarding how this will affect you and allows you to sign up for their newsletter so that you can remain informed on the changes as they occur. Some of the issues that the Town Square is currently addresses are:
- How much it will cost?
- The issue of “Liability Shift”
- Is this new technology?
- How will the cards be “swiped”
- Old long will it take to adopt the new technology?
According to the Town Square, it will take approximately 5 years to complete this transition, but the sooner your business is up and running with the new technology; the more protection your business will have against credit card fraud!
“Today, Square announced a new version of its popular mobile payment system that will support EMV chipped credit cards. EMV is a joint effort from MasterCard and Visa to help improve security credit and debit card transactions and is set to become a standard in the US by October 2015. In addition to EMV-equipped credit cards, the new version of Square’s payment system will still feature support for legacy magnetic strips, so customers will still have the option to swipe and sign.”
I have included links here to several other articles regarding the new EMV and I am sure that there are MANY more and there will be MANY more to come:
I would be grateful if you would also forward any information you that you may find or be aware of to me at http://www.fixyouraccounting.com/contact/ – so I can continue to update my readers and become more informed myself.