84 August 2015
|
beautystorebusiness.com
Major banks have also been helping
wean the United States off fraud-vulnerable
mag-stripes, issuing chip cards when the
older cards expire or when customers
seek replacement cards. "Chip technol-
ogy is an important tool in increasing card
security, and we want our customers to
have the best possible experience when
using their payment cards," says Titi Cole,
retail products and underwriting executive
for Bank of America. The bank has been
upgrading customers since 2012, she says.
"The number of issued chip cards [in the
United States] is expected to reach 600
million by the end of 2015," says Vanderhoof.
BITE THE BULLET
Of course, the rub for beauty stores is that
getting from here-to-there will cost coin.
Expect to pay $300 to $1,300 for each new
chip card terminal you bring in. "Depending
on the features you're looking for," says
Phil Wimberly, vice president of integrated
solutions sales for OpenEdge, a payments
software provider. Plus, you'll have to train
staff to deal with the new technology.
One of your best resources for the new
terminals will probably be the business
that's already handling the processing of
your mag-stripe cards, Wimberly says.
Take heart though, with one silver lining:
Your customers will most likely find making
the switch fairly intuitive. There will be
a few differences. Chip cards need to be
inserted into a terminal rather than swiped.
And a chip card needs to stay inserted in the
terminal until a transaction is completed.
For verification, chip cards will require
either a customer signature or a customer
PIN. And some will be "contactless," requir-
ing only a simple "wave" over a terminal
to initiate a transaction. During the first
few years of the transition, chip cards will
also come with a conventional magnetic
stripe, which will enable consumers to make
purchases at businesses still mired in mag-
stripe technology. But the primary point to
remember is that if your beauty store has
chip card terminals, you won't be on the
hook for fraud created by any mag-stripe
card you accept as payment, according to
Shamas. Essentially, as long as your busi-
ness has made the effort to accept chip
cards, the credit card companies and banks
aren't looking to penalize you for accepting
a mag-stripe card as the United States
transitions to the newer cards, she says.
THE DEADLINE IS
APPROACHING
As the October deadline looms, all the
major credit card companies are ramping
up massive business educational cam-
paigns, hoping to help businesses dodge
the fraud-liability tax. "Unfortunately,
many small merchants do not know
about EMV or what they need to do to
take advantage of it," says Anré Williams,
president of Global Merchant Services
of American Express. "We created the
Small Merchant EMV Assistance Pro-
gram to help them." But even with the
massive PR push, industry watchers fret
that this fall there will still be hundreds
of thousands of uniformed businesses
seeing red over new fraud liability. "The
Achilles' heel for EMV merchant adoption
will be small and micro merchants that
are not only unprepared for EMV, but
even unaware of the fraud-liability shift
in the United States this year," says Nick
Holland, head of payments for Javelin
Strategy & Research. Don't be one of
those retailers.
For deep background on your beauty
store's migration to chip card process-
ing, check out the VISA Merchant Chip
Acceptance Readiness Guide (usa.visa.com/
download/mer chant s/vis a-mer chant-
chip-acceptance-readiness-guide.pdf).
You can also check out a video illustrat-
ing how the new chip card technology
and its cryptogram work at the EMV
Connection (emv-connection.com/contact-
chip-card-online-authentication). It's a
visual, nontechnical presentation that
will walk you through why chip cards
are so much more secure than mag-
stripes. While you're at it, bone up on
the latest in credit card fraud prevention
techniques with a white paper authored
by the Smart Card Alliance. It focuses on
using chip cards, encryption and tokeni-
zation to further protect your business
against fraud (smartcardalliance.org/
publications-technologies-for-payment-
fraud-prevention-emv-encr yption-and-
tokenization). The moral of the story? Yes,
Virginia, membership does have its privi-
leges. But it's also got its responsibilities.
■
Joe Dysart is an Internet speaker and
business consultant based in Manhattan,
New York. He can be reached at joe@
joedysart.com.
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