How Retailers Can Easily Cut Down on Credit Card Fraud
                     How Retailers Can Easily Cut Down on 
Credit Card Fraud
In a way, using the new EMV (Europay, Mastercard, Visa) “chip” card terminals is a 
lot like having insurance. If you never run into trouble, you may not even realize you 
have it. Insurance only really pays for itself when you get into trouble. But when you 
do, you’re sure glad you have it. And it’s the same for using EMV-enabled terminals 
for card-present transactions.
According to an article on the US News and World Report website, “Embedded in 
every EMV card is a computer chip that creates a one-time code for each 
transaction. If someone tries to steal this code, it is worthless because it is valid for a
single use. By comparison, magnetic strip cards store all key data, such as a 
cardholder’s name, credit card number and CVV code, on the strip, and once the 
information is written there, it never changes.”
The EMV compliance “rules” went into effect in October of 2015, although gas 
stations had until October 2018 to comply. The word rule is used here because the 
truth is there’s no law requiring any merchant to use an EMV terminal at the point-of-
sale.
Adoption of EMV technology in the US is completely optional. Neither banks nor 
merchants are under any obligation to use EMV cards and terminals. No one will 
shut you down, or even send you a reminder, if you fail to implement an EMV 
terminal. However, there is a strong incentive to use one.
Credit card fraud is a multi-billion dollar problem, with almost half of it occurring in 
the US. When it comes to reducing credit card fraud though, EMV technology really 
helps. A new identity fraud study by Javelin Strategy shows “the recent shift to 
EMV (embedded chip) cards is helping to contain existing card fraud. According to 
the study, existing card fraud losses declined from $8.1 billion in 2017 to $6.4 billion 
last year.”
Here’s how merchants are incentivized to adopt EMV technology. Before EMV 
technology, when there was a fraudulent charge, the banks were typically held liable.
And the same holds true today for transactions in which both the card and terminal 
are EMV-enabled. The problem occurs with asymmetrical transactions.
An asymmetrical transaction is one in which either the card or the terminal are EMV-
compliant, but not both. In such circumstances, should a fraudulent transaction 
occur, the party not using EMV technology is held liable for the charges. In other 
words, if you don’t use an EMV terminal, any fraudulent transaction using an EMV 
card on your machine is your headache. And the only way to make sure you never 
suffer from this headache is to start using an EVM-enabled terminal. It’s like a 
wonderful insurance policy you hope you never need.
According to Lead Genius, “It doesn’t matter if your customers aren’t using EMV-
enabled cards; not everyone has one yet. As long as you are EMV compliant, you 
won’t be liable for fraudulent swiped transactions whether they come from chip 
transactions or swipe transactions.”
You’d think this is the type of insurance every retailer would want, but so far, that 
hasn’t happened. According to Digital Transactions, “[Only] 53.5% of general-
purpose U.S. card-present transactions in 2018 were so-called chip-on-chip, 
meaning both the point-of-sale terminal and the card were EMV-enabled.”
The good news, according to Visa, is that “EMV chips cards continue to gain share 
and cut counterfeit fraud.” EMV technology is doing what’s it’s supposed to do, it’s 
just that not every retailer is onboard yet.
The slow adoption is hard to understand. Not only does EMV technology provide 
very inexpensive risk management for retailers, but the technology also produces a 
better end-user experience when taking advantage of contactless credit cards, which
use the same technology as EMV chip cards. According to Bankrate, “A contactless
transaction typically takes between one and two seconds to complete, while 
traditional cards can take around 10 seconds to process. The consumers benefit by 
having a faster way of completing a transaction, and it’s more convenient than 
waiting for 8 or 10 seconds while the transaction gets approved.”
If you haven’t implemented EMV terminals at your retail location, you’re vulnerable to
unwanted fraudulent charges. This is especially true for small and mid-sized 
business who are more likely to be targeted for that very reason.
Do yourself and your customers a favor and upgrade to one of AppStar 
Financials’ EMV-compliant point-of-sale terminals with NFC (i.e., contactless) 
technology. AppStar Financial, which has been around since 2002, offers reliable 
equipment with the latest technology and software, along with the best customer 
service in the industry. Give us a call.