In an effort to counter credit card fraud, US credit card companies are transitioning to credit cards with embedded chip. These chip cards are based on a global payment standard called EMV (Europay, MasterCard, Visa). Most foreign countries are already using these cards so we are a little late making the switch.
The difference between an EMV chip card and a magnetic strip card is the embedded chip in the EMV cards. Payment data is stored on the chip instead of the magnetic strip, this makes the payment data more secure compared to magnetic strip cards. We have all heard stories of credit card information theft at gas stations via the magnetic strip. EMV chip cards are currently secure from such. EMV chip credit cards are also globally accepted.
The major impact to small businesses is the liability shift starting on October 1st 2015. This means liability in card-present credit card fraud shifts to the least EMV-compliant party. If a magnetic-strip credit card is fraudulently swiped at a business, then the business is liable for the charges and no longer the credit card company.
Most small businesses should have received replacement EMV terminals from their credit card merchants. The new terminals look similar to the old except with an additional slot for the EMV card insertion.
There are no additional steps to install an EMV terminal compared to a traditional terminal. Moving to EMV credit card terminal protects small businesses and it’s customers from credit card fraud.