Anti-fraud credit cards could cause headaches for local businesses

Anti-fraud credit cards could cause headaches for local businesses

By Chris Teale (File photo)

Small businesses in the Port City could run into trouble this fall, as they come up against new requirements to accept antifraud microchip credit cards set to go into effect October 1.

The new system, Europay, MasterCard, Visa — EMV for short — has been in use in Europe and Canada for years and is a global standard aimed at reducing card fraud and identity theft, augmenting the magnetic stripe found on debit and credit cards with a microchip. In 2017, all new cards issued must have these chips, but businesses must be ready to process them beginning this year.

From the businesses’ standpoint, they require what are known as EMV-ready terminals, where the customer inserts their card as opposed to the cashier taking it from them to swipe it themselves. The terminals already are widely-used in chain retailers like Giant, Target and CVS.

In the Port City, Danielle Romanetti, owner of knitting shop fibre space, has been at the forefront of helping local businesses understand the coming changes. She prepared a one-page handout for the Alexandria Chamber of Commerce to distribute to other businesses explaining the new requirements, and says the fraud-prevention measures included in the new cards will be of enormous benefit to both businesses and customers.

“[EMV] should help protect us from receiving fraudulent credit cards,” she said. “The new chips, which have been used in Europe for quite some time, are requiring that our customers insert the card themselves and a chipped card is not going to be able to be replicated. A lot of the fraud is happening from gas station machines and other places where the card readers are reading numbers and then allowing someone who has hacked that machine to replicate the card. The chips are preventing that from happening, so it’s really cutting down on fraud.”

Romanetti said the shift to EMV compliance could be complex depending on the business and whether a business currently processes debit or credit card payments using its point-of-sale software directly or through an external terminal, with card sales then being logged in the system. She said that if it is important to a business to stay with their current payment processing software, employers should see what EMV-compliant options are available from their current provider.

“For me, the most important thing was to not change my point-of-sale system, because of our database and it’s the center of everything we do and I’m not interested in changing it,” Romanetti said. “If it’s important to a business to do that, to stay within their POS, then they have to start by contacting that company and finding out who they offer as a processor that is providing the equipment to be EMV-compliant. For us, that was only one option, we only had one processor that we could use. We could keep our merchant services, we just needed to change to this processor.”

She added that the change might be simpler for businesses that ring up customers using a manual machine and use a separate terminal to charge credit cards. Those businesses can simply purchase a new card terminal to maintain their current process.

Romanetti said when she shifted to the new software, it took her a few hours, but that it was relatively straightforward. One thing that might be difficult is for consumers and cashiers to change their habits when it comes to processing card payments. While people may be used to doing so at big box stores, it is quite a change for small businesses to require customers to swipe their own cards.

“What’s a little weird is that in the U.S., we’re not accustomed to using EMV processing,” Romanetti said. “The biggest change is the fact that a consumer is actually going to be processing their own credit card, just like they do at a grocery store. Right now in our store our customers are swiping or inserting their own card into the machine. That’s been the biggest hurdle, it’s just a retraining on habits of the consumer because they’re not used to that … in a small business.”

Romanetti said the rise of microchipped cards has been somewhat disregarded by some business owners, and with the October 1 deadline now looming, they have started to move more frantically to cope with the change.

“For whatever reason, this industry ignored it for quite a while even though they knew it was coming and so there’s this mad scramble to get things up and running,” she said. “For a large POS [system] like the one that I’m using to say to me, ‘Well you’ll have only one company you can process with because there’s only one that we’re working with to provide these terminals,’ it really just shows that they’ve not been working on this for very long.

“There are probably not a lot of options out there for becoming EMV compliant as far as processors. Businesses are just going to have to talk to merchant services to find out who they can process with.”