EMV Compliance – Does This
Affect You or your Buyers?
Jennifer Nietz - Director of Operations
At least 25% of our clients currently serve the retail space by providing industry-leading hardware technology, and the biggest topic of discussion is EMV and compliance. This month I will be exploring retailers and how prepared…or unprepared they were for the October 1st deadline.
In a recent press release published on September 10, 2015 on IBISWorld.com, author Andrew Krabeepetcharat discusses EMV Compliance and the federal requirements that will be effective on October 1st. His article states:
Credit card companies are making the final call for US merchants to switch over to EMV chip technology in anticipation of the looming deadline. Merchants now have less than one month to update their point-of sale (POS) terminals to accommodate the new payment technology. Converting from POS terminals that solely read older cards with magnetic strips to those that read cards with EMV chips will be required by October 1st. From that day forward, the liability for credit card fraud will be placed on merchants instead of banks. In other words, merchants electing to forego the use of EMV chip technology will be responsible for any fraudulent charges that result from the use of antiquated magnetic strip technology.
So are retailers going to meet this deadline? What does this mean for hardware manufacturers and resellers? I reviewed an article and research compiled by ShopKeep.com of their clients. ShopKeep provides a mobile POS solution and works with retailers across the US. Their conclusion? Retailers aren’t ready, so get ready, manufacturers.
From ShopKeep.com research:
With just a few weeks left until the deadline, 78% of SMB retailers aren’t yet EMV chip card compliant. They found that 13% and 11% of retailers are “extremely” or “very” confident they’ll be compliant by the October 1, 2015 deadline. However, the hard fact remains that the deadline is less than a month out and only 22% of SMB retailers are compliant.
Their research also found that so many retailers say EMV adoption is unnecessary. Non-compliant SMB retailers will risk negative financial impacts from potential chargebacks resulting from fraudulent charges. Perhaps the reason so many retailers are considering compliance unnecessary is because they don’t understand the liability shift. Over 20% of retailers said their “minimally” or “not at all” confident they understand the liability shift, and shockingly, 14% indicated they “don’t know about the shift”. Clearly retailers are still feeling a bit uninformed about the severity, or even the objectives of the shift.”
What can you do as a hardware provider or reseller? I would recommend taking a couple of the below steps:
- Educate – educate your prospects and clients regarding the regulations. Set yourself apart from your competition and be an industry expert. Write blogs, publish new website content, post on social media, and finally pick up the phone and let your prospects know about the regulation and that you are there to help them.
- Development – develop your product to meet the regulations. Retailers, while delayed, will need to integrate the new technology to mitigate the risk to their businesses.
- Sell – yes, sell! Situations like regulations are a perfect time to move inventory. Creating urgency in a buying system, especially due to a federal regulation, will definitely accelerate the sales process.
Questions or comments? Please contact Jennifer Nietz at jnietz@teamCOACT.com.