Failing to Accept EMV Chipped Credit Cards Can Be Costly

We have recently learned that many credit card processors have implemented fees in 2018 to merchants who don’t have a chip reader terminal.  Really, this isn’t a fee.  It is a fine that is unfairly implemented by unscrupulous credit card processors who are simply making an extra buck off you.  It’s not just a buck though.  One processor is charging an annual fee of $299 to all merchants who don’t have an EMV chip reader terminal. They are blaming MasterCard and Visa.  This is absolute hogwash.  Although we do recommend that you implement the chip reader terminals for your own protection, there is no fee or fine from Chosen Payments if you don’t use one.

If you want to avoid the fee from another processor, come on over to Chosen Payments.  Not accepting EMV should not cost you more money.  United States merchants have been very slow to adopt the EMV technology.  In fact, by October 2015, all merchants were to have implemented the chip reading terminals.  If haven’t, you are not the only one.  There are hundreds of thousands of merchants who have not changed over.  This can be a problem for you but not necessarily because you haven’t changed over.  In a recent case we shared with you, a grocery store was fined $4,000 for excessive fraudulent transactions that should have and could have been avoided if the grocery store had implemented the EMV readers.  The grocery store balked at replacing their old terminals because of the expense of changing out fifteen terminals at one time.  Well, the fine combined with the changeover ended up costing them more than triple.

No Extra Risk

Whether you have an EMV terminal or not does not cause any extra risk for a credit card processor in case of fraud.  In fact, your processor will never pay for a fraudulent transaction unless you close up your business in the middle of the night owing money to a card brand such as MasterCard or Visa.  However, you, as a merchant will have to pay in a case of fraud. You’ll lose the transaction dollar amount which will be deducted during a chargeback and be charged for a chargeback fee as well.

EMV cards are really designed to protect cardholders from having duplicates of their cards made from skimming devices.  Skimming devices are placed into gas pump terminals and similar places and a fraudster can get your card information such as the number and expiration date when you unknowingly insert your card.  However, attempts to use that card are limited to merchants who do not use EMV reading terminals.  An EMV transaction is uniquely processed.  Rather than your actual card number being used to transmit the transaction data, each transaction uses a unique one-time code.  You can see the value of having an EMV reading terminal to more securely transmit your transactions with this explanation.

EMV does help protect you from fraud.  It can help you from losing chargeback cases involving fraud. EMV Compliant terminals cost money but on a one-time basis.  A credit card processor who is charging you a fee or a fine only hurts your business and adds on expenses that decrease your bottom line profitability and are unnecessary.   Not having an EMV chip reader also sends a negative message to your customers who know you are behind the times and expect merchants they do business with to protect them from fraud by using current technology.  They might wonder how safe their credit card data is with your old-school equipment.

Don’t bother paying non-compliance fees if you don’t have an EMV terminal.  Ditch your current processor for one that will simply sell you a new one that complies with current technology for about the same price of the fine/fee.

As a side note, never lease a credit card terminal.  You will end up paying double the price of the machine over the course of a lease and still end up with a “buy-out” amount to transfer ownership to you.  In some cases a merchant services provider may give you the machine for free based on your volume or let you use a machine as long as you process with them.  These things are negotiable with many credit card processors.