Now that consumers and merchants around the United States have begun the transition to EMV chip-enabled credit and debit cards, the country is becoming less dependent on magnetic stripe technology and the security risks it presents. How secure are EMV cards and what effects do they have on businesses when it comes to fraud prevention?
Implementing an EMV credit card terminal is just the first step for merchants. It is also essential to understand the risk for fraud when using chip cards and chip readers, as well as steps that can be taken to secure transactions for your customers.
Chip Cards Are Safer – Not Free of Fraud
While it is true that EMV technology makes payments more secure than magnetic stripe credit cards, they are not 100 percent immune from the risks of fraud. According to a CNN Money article about chip cards and security concerns, the FBI believes that “cards are still vulnerable to fraud,” and merchants should be diligent when it comes to accepting credit and debit cards, and processing payments. This is due to the fact that magnetic stripes on cards contain unencrypted information that can be used by fraudsters to create clones or easily use account numbers to pay for goods online.
The issue is still prevalent today because the cards that banks and financial institutions have been distributing over the past year contain both a chip and a stripe, since not all merchants have upgraded their card readers. Criminals are able to use skimmers on readers to steal credit card data, which they can then use online without having to insert the chip card into a machine. In addition, many EMV cards only require a signature with a transaction instead of a PIN.
Upgrading Your Payment Terminals
The main point to note is that chip-enabled cards are being implemented in the United States because using an EMV credit card terminal is more secure. These readers do not store payment information on the merchant’s network, making it more difficult for fraudsters to steal a consumer’s data.
However, many merchants still have not installed EMV card readers in their businesses because they are still able to accept cards that have a stripe. This is risky, because it opens the door for criminals to tamper with older readers to intercept card numbers and data that will allow them to create new cards.
Leap Payments works with merchants to ensure that their business is properly set up to accept EMV cards. This greatly reduces the risk for fraud and ensures that you have the equipment you need to help protect your customers’ data and keep the connection to your payment processor secure.
Just having EMV readers in your business is not enough, however. It is necessary to work with your merchant services provider to be able to detect and deter fraud as a way to help your business grow. You can learn more about all the ways Leap Payments can assist you with your transition to EMV technology by contacting a representative today at (800) 993-6300.