NCR Counterpoint Blog

EMV Acceptance: The Pros and Cons for Your Small - Medium Sized Business

Posted by Kendall Reed on Oct 11, 2016 7:16:00 AM

A new report by Sage, reported that in Q1 of 2016, only 39 percent of small and medium businesses (SMBs) have implemented the required technology to accept Europay, Mastercard and Visa (EMV). Why the lack of adoption?

For the past year, every business in the US has been faced with implementing new payment technology: EMV. Most SMB retailers believe that EMV applies to the big box stores and it’s an unnecessary process for their business. We’ve outlined the pros and cons for why an SMB retailer may or may not want to adopt EMV:


Protect Your Business: The longer small businesses wait to adopt new payment technologies, the greater the risk they could face liability from fraudulent transactions. The cost of adopting a new system could be like a drop in the bucket next to what they could be held liable for if their shoppers are hit by credit card fraud originating from their business

Avoid liability: The biggest incentive for EMV adoption is that retailers who haven’t made the transition to chip cards are now liable for counterfeit transactions that used to be covered by banks. The costs of the fraud, known in the industry as “chargebacks,” are beginning to stack up and have even more potential to grow. Chargebacks among small and medium-size merchants rose 15% in the fourth quarter from a year earlier, according to a recent survey by The Strawhecker Group. Other experts claim the total loss due to chargebacks is probably in the tens-of-millions of dollars, and will likely continue to rise

Appeal to Your Consumer Base: Consumers will very quickly start to prefer shopping with retailers who have adopted EMV payment systems over those that don't, especially as breaches at big name retailers like Target and Home Depot have made the general public more security conscious," says Andrew Avanessian, VP at security firm Avecto told FierceRetailIT. Consumers are also looking toward more tech savvy payment solutions, such as contactless payments or Apple Pay. Enabling EMV technology is the first step in adopting future payments

Card Payments are Here to Stay: Many customers are now equipped with chip cards that have been reissued by their banks. The credit card is not going away – these EMV enabled cards will play a part in payments for a long time to come. Millions of people will continue to rely heavily on their cards


Duration of EMV implementation: EMV isn’t as simple as flipping a switch. There are a few layers of installing the new technology that contribute to the length of time to deploy.  

Expense of deploying new technology: A study by Software Advice reported that 33 percent of the retailers sampled say that 'cost' is the primary component for not being EMV ready. SMB retailers normally operate on a smaller margin, so the cost of updating might be daunting. or complex, integrated systems, the upgrade can run into the thousands of dollars. But for small businesses with only one or two payment terminals, the upgrade is fairly inexpensive. Some basic EMV card readers cost less than $100.

Randy Vanderhoof, executive director of the Smart Card Alliance, recommends merchants invest in the technology sooner rather than later: "It is probably very disruptive for their business and the costs [of the technology upgrade] are high based on their current experience with fraud, so they aren't seeing a benefit at this time," says Vanderhoof. His main concern is that delaying the implementation may cause a business encountering the cost of fraud before they take the EMV shift seriously. "Then they will have to not only pay for the loss, but they'll still have to pay to update their systems."

Vanderhoof recommends the following to get started in the EMV shift:

  1.  Meet with your POS provider or card processor to determine the best course of action for your specific situation.
  2. Determine what kind of upgrade is best for your business, whether it is upgrading your current payment terminals or purchasing new ones with integrated EMV software.
  3. Schedule an appointment with your POS provider to test and certify the system.

The bottom line is, regardless of the cons, can you afford to take the risk of not implementing this new protective technology?

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Topics: EMV