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Simon Brisk

How EMV Chip Card Technology Will Impact Online Sales  

Simon Brisk
How EMV Chip Card Technology Will Impact Online Sales  

If you're like most online merchants, you haven't paid a whole lot of attention to EMV chip card technology. After all, it's not something that will directly impact your online business, right? Sorry to break it to you, but you're likely very wrong on that count and it's predictable that online fraudulent charges will skyrocket after the October 1st EMV chip card deadline.

What Is EMV Technology?

EMV stands for Europay, MasterCard and Visa. Basically, an EMV chip card replaces the magnetic strip method of obtaining credit card information with a chip inside the credit card. Banks are currently issuing cards with both magnetic strips and EMV chips so that consumers won't be inconvenienced at registers that are not equipped to read the new technology. However, the mandate that all point of sale facilities need to take credit card information via chip card technology goes into effect on October 1, 2015.

What does this mean for merchants?

  • If a fraudulent charge occurs at a facility not using the updated technology, the merchant themselves will be liable for the charges rather than the bank.
  • Most places that take point of purchase payment will be switching over.

What exactly does EMV chip technology do differently than the standard magnetic strip? The magnetic strip is static information. If the information is copied once, it's reusable infinitum and therefore quite easy to replicate and use for fraudulent purchases and withdrawals. With EMV chip cards, the code is encrypted differently each time and no series of data can be reused, which means that duplicate cards are no longer possible.

How This Impacts Your Online Business

EMV Technology - Image courtesy of hin255 at FreeDigitalPhotos.netMany online businesses haven't paid attention to the hubbub surrounding EMV chip cards. Online purchases take place without the card present, so the EMV technology doesn't help prevent fraud online.

People who commit credit card fraud will be looking for new ways to do it and the easiest method will move to online sales. This isn't just a guess. Europe has been using EMV chip card technology for some time and saw a huge boost in online fraudulent charges in the first year after these cards went into effect, so it's likely to happen in the US as well.

While online merchants are under no obligation to change the way their purchases are made, increasing security procedures will benefit future sales in a number of ways.

  1. Consumers will become hyper aware of online fraud as the situation escalates and will feel more confident using portals which have increased security measures.
  2. Marketing increased security efforts and sending literature to educate customers will help build trust in the site and keep the company's name present with consumers.
  3. Regardless of how the situation is remedied, a consumer who has a fraudulent charge from your business may think negatively of the business.
  4. Adding security measures will decrease the amount of fraudulent charges that get through your portal.Online merchants who take a proactive approach to these oncoming credit changes are likely to be better prepared for consumer shifts in confidence and less likely to fall prey to an overabundance of fraudulent charges. Are you ready? Let us know in the comments.

EMV Technology - Image courtesy of hin255 at FreeDigitalPhotos.net

Simon Brisk is a seasoned search marketing professional who has been in the industry for more than eight years. He loves the challenge of the constantly changing landscape; it allows him to continually innovate new concepts and ideas on how to future-proof his data driven search marketing company's service offering.

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