COMMENTARY: A Five-Point Checklist for Merchants Trying To Beat the EMV Clock

Credit card fraud in the United States is at epidemic levels. Last year, the U.S. accounted for more fraud than the rest of the world combined. And the fraud rates are accelerating. EMV technology, which has shown to greatly reduce in-store fraud in Europe, is finally being rolled out in the U.S., with an impending deadline in October 2015 when retailers will be liable for in-store fraud for cards that have chips on them.

By the October deadline, more than 70% of cards in consumers’ hands will be EMV-enabled. However, most retailers are well behind schedule in supporting EMV. Where Highline has worked with its partners to implement EMV, those retailers are seeing very high usage of the technology, with EMV transactions accounting for more than 40% of all transactions. In some stores, EMV amounts to almost 60% of all credit card transactions. Apple Pay currently accounts for about 6% of transactions, but this figure is growing.

These are much higher numbers than we expected to see when we installed the first system in New York in April, but it demonstrates that consumers are armed with the new secure chip cards and are out in stores using them.

With less than two months left until the liability shift, retailers need to catch up as the public is out there ready and spending. Here are five tips retailers should consider as they look for the right solution for them.

1) If credit card payments are integrated with the POS software, call the POS vendor and ask for specific recommendations for upgrading. Do they require new hardware for processing EMV cards? Will their software be ready in time for the October 1 deadline? If not, when? Regardless, ask what steps to take to become compliant.

Beware of companies selling “EMV-ready” terminals. Ask specifically if the vendor is certified to process EMV transactions today. An EMV-ready terminal is merely capable in principle of accepting EMV cards; it does not mean that the vendor is certified to process EMV transactions now. EMV certification is a complex process that involves the terminal vendors, software running on the terminals, the processing network, and the credit card companies. So ask your vendor if they are EMV certified.

2) If credit card payments are separate from the POS system, you can shop around for options. Call your payment processor and ask the same questions as above. If your payment processor isn't ready, or won't be ready for many months after the deadline, you should shop around. Some processors have been ready for a while. You might be able to get early-termination fees waived from your existing processor since they haven't yet complied with the new requirements for EMV.

3) Ask your processor if they support Apple Pay, which lets customers securely pay with their phones. If you're going to upgrade hardware now, you may as well get Apple Pay, too. Most processors advanced enough to do EMV now also support Apple Pay.

4) Treat the EMV requirement as an opportunity. If your existing software vendor or processor isn't ready, chances are you are on an obsolete platform. Shop around for a modern, ideally cloud-based, mobile system. A cloud-based system dramatically reduces your administration and startup costs, and your data is available anywhere, any time.

5) Look for deals. Some new systems offer the latest in cloud/mobile technology but don't require any investment in hardware.

We are sitting at the convergence of three major changes that are having a huge impact on in-store retail today. First, the introduction of the EMV standard in the U.S. and the liability shift that will happen this October. Second, the move to the cloud to help retailers innovate rapidly while simplifying their businesses and reducing operating costs. Third, the introduction of mobile technology into the retail space, which is dramatically changing the consumer experience, including how shoppers move through a store and what they do when they are there.

—Sushil da Silva is the co-founder of Highline Software, New York City.