Wednesday, September 16, 2015

Are You Ready For EMV?

What is EMV? It is the new technology designed to reduce/prevent fraudulent credit and debit card transactions. In addition to the magnetic strip each card has a microchip that creates dynamic data with each transaction which is intended to prevent the data from being copied and used fraudulently. The traditional magnetic strip stores this data which allows it to be easily copied and used by someone unlawfully. So what does this mean to the small craftperson accepting payments on their smart phone?

With the nationwide adaptation of this technology on October 1, 2015 you will impacted in a very real way. If you currently are using the Square, PayPal or other type of reader you need to know that with the changing technology their is also a shift in how the law will be treating fraudulent charges made on these readers. Currently if you accept a fraudulent card payment from someone, you are not liable for the loss, the credit card company is. After October 1, 2015 this changes. If you accept a fraudulent card payment with your current reader after that date you will be liable. In other words you will eat the loss of the fraudulent payment.

This new way of processing payments was developed by Euro, MasterCard and Visa (EMV) and they seem to have found a way to dodge some of the liability, and shift it to the merchant accepting the payments. If you have not updated your reader to the newest device that reads the microchip they will not reimburse for any loss sustained by you.

So what can you do? Square and PayPal Here is offering to upgrade your current reader but it comes at a cost. Square's new reader is $49.00 but they are offering to reimburses up to that amount in transaction fees accrued in the first 90  days of use. Their web site indicates that some merchants may qualify for a free reader. I logged in on my account and I would have to pay for the reader. It was unclear what the criteria is to receive a free reader. Square will not be sending out the new readers until the end of the year, you will not be charged until they ship it out and if you pre-order they will cover the liability if you accept a fraudulent payment from the time you pre-order to when you receive your new reader.

PayPal Here says their reader is available October 2015. The cost is $149.00 with a $100 rebate if you process $3000 in payments within the first 3 months.

With the fall craft season soon upon us if you accept card payments you will need to make a decision on what you want to do about the new technology and shift in liability. For more information you can check out these links:

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