December 1, 2014

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EMV Technology Q & A Part 2

More of our series on EMV Technology–thanks to Chase/Paymentech for these vital insights. Have more questions on EMV? Contact us today at 480-603-3020.

Are there any best practices for EMV migration?

  1. Training and product awareness at both the business and the employee level is crucial to a successful implementation. As EMV acceptance is very different than the traditional magstripe (the card is inserted into the terminal as opposed to swiped, for example), it is imperative that everyone is familiar with the new requirements to make the customer experience as smooth as possible.
  2. Don’t wait to migrate. You may begin to feel the pressure once the EMV card migration starts to reach its critical mass – with issuing banks beginning to issue chip cards to new and existing customers. Businesses that have not already migrated to EMV may consequently have to answer to their customers as to why they have to continue to swipe their new chip cards – especially when the market presents chip technology as the safer way to pay. Don’t wait until the last minute to migrate your business.
  3. Get a business plan together even before implementation begins. As equipment upgrades have the potential to be both costly and time consuming, it’s best to get started early. Figure out how much it’s going to cost, how long it’s going to take and plan accordingly. Also, when planning on how to update your systems to support this change, you will want to take a hard look at the cost vs. benefits of EMV. In some cases, fraud prevention alone may not deliver an acceptable ROI for effort required to implement this technology. With that, you will want to achieve other benefits when displacing your existing hardware or software solutions (e.g. update network connectivity, build out support for a loyalty or gift card program, include ability to accept contactless / mobile payment transactions, etc…).

What does EMV migration mean for card-not-present (CNP) merchants?
As EMV technology is adopted in the card present space, it is expected that fraud will also shift to the least secure channels, including CNP. From an online fraud perspective, it’s important that CNP businesses be prepared for this anticipated shift, as experienced in other regions that have already migrated toward chip card technology.

As fraud migrates online and fraudsters continue to get more sophisticated, the tools you have in place now may no longer be advanced enough to protect you and your customers. Strategy is key and it’s imperative to take the extra measures to know good customers and good customer behavior (beyond just AVS and CVV). It is recommended that you avoid the use of Address Verification and card validation values (security code) checks as your sole fraud detector since the false positive exposure can be high with these tools alone. You should consider strengthening the value of these tools by supporting additional technology to confirm and mitigate fraudulent activity.

A good fraud prevention tool will enable in-house management in real time, with no negative impact on your good customers’ experiences (those transactions that are not fraudulent in nature). Having the ability to control your fraud prevention at the business level, without the required assistance of IT support or third-party vendors, helps to ensure that your good transactions get through and your customer is not burdened with holds or declines based on suspected fraud. Simply put, you can prevent the fraudulent transactions without compromising the legitimate ones. This will protect you, your good customers, your bottom line and your brand.