Over the past few months we’ve been using our blog to help keep you informed on the ongoing EMV implementation in the United States, with the hope that it will help you prepare your campus’s EMV strategy. While we are not far away from the October 1 liability shift date, don’t fret if your campus is not in a position to accept EMV payments by that date. According to a recent survey by The Strawhecker Group, only 27% of U.S. merchants are expected to be able to accept EMV payments by October 1.
As we’ve said in previous posts, the liability shift is not a mandate, law or regulation. If you don’t have the ability to process EMV payments after October 1, you’ll still be able to process cards. Having said that, you will be on the hook for any fraudulent transactions if the payer tries to use an EMV card and your business office cannot process it. Remember, the liability shift pertains to EMV transactions. The side that is the weakest assumes liability for the fraud; meaning that if the card is not an EMV card, the issuing bank maintains liability. If the card is an EMV card and the merchant is unable to process that payment, then the merchant accepts liability.
To help you further define your EMV strategy, ask yourself these four questions:
How many devices do we want to replace?
Total up the number of places on campus where you are processing in-person credit card transactions. Next, look at payment volume at each station. Understanding how much each is used can help you determine whether you should switch out all of your peripherals at once or if you would be better off using a phased approach.
How much will it cost to replace your peripherals?
EMV/NFC peripherals are not inexpensive, especially when you incorporate the cost of the software needed to support the payments and the encryption necessary to reduce your PCI scope. Knowing how much it will cost to replace your campus’s peripherals is an important variable in this equation. Reach out to your payment software provider and/or processor for pricing on the peripherals that work with their services. Also take a look at your budget to see how much room you have for an upgrade if you determine you need to move sooner rather than later (more on this in a moment), as with a limited budget, you will want to prioritize the high volume stations identified in your answer to question 1.
How often do you see POS on-campus fraud?
This is the real meat of your analysis. Calculating (for the previous year) the dollar amount of card-present fraud your campus has experienced is an important factor in helping you settle on an EVM strategy that is most appropriate for your school. Most campuses experience little card-present fraud. That shouldn’t be surprising. Fraudsters are stealing card info to buy gift cards, electronics or jewelry; not to pay for tuition in the college or university business office. Having said that, each campus is different and it is important for yours to understand your potential exposure after the liability shift.
When would it be advantageous to replace devices?
Now it’s time to put it all together. Compare the amount of card-present fraud in your answer to question 3 with the cost of replacing peripherals in your answer to question 2. If the amount of card-present fraud exceeds the cost to replace devices, your campus will probably want to move sooner rather than later. If the opposite is true, which is likely the case for most campuses, you may be in a position to select the best time to execute the upgrading of your EMV hardware (for example, when payment volume in the business office is low and your cashiers have the time to attend training).
We hope these questions will serve as a useful guide in creating a strategy specific to your campus. Stay tuned for the last part of our EMV series next week!
Did you miss Part 1? EMV: Behind the Curtain