By: Georgia Stavrakis, CPP
It’s been a year since the U.S. migrated to EMV technology, and more than 1 million businesses now use EMV chip-embedded credit card readers. Unfortunately, criminals are taking full advantage of businesses that haven’t fully made the switch, leaving even small businesses vulnerable to costly chargebacks.
Restaurants have been plagued for years by counterfeit, stolen and cloned credit card activity, but it’s much more apparent now that liability for these fraudulent charges shifted to the party using the least secure technology – most often the merchant. Customers who may frequent your restaurant could have been using counterfeit cards for months without exposure, because the issuing bank was taking the loss. But now, your business, and livelihood, could be held liable. If you haven’t enabled EMV chip-reader technology in your restaurant, here are a few reasons you should do it before you serve up that next batch of sweet tea.
Criminals prefer magstripe
If a credit card does not have a physical EMV chip (magstripe only card), the data on the card may still be EMV. Here’s how. When criminals purchase credit card numbers online, the data — regardless of whether it is magstripe only or EMV technology — is loaded on a standard magstripe counterfeit card and shipped to them. With more than 67 percent of U.S. credit cards now using EMV technology, odds are that the counterfeit magstripe card they received uses EMV data.
This is when having an EMV chip-embedded card reader at your business comes in handy. If the criminal swipes the counterfeit magstripe credit card housing EMV data on an EMV card reader, it will prompt them to use the chip reader. They won’t be able to use the card, because no actual chip exists. For this reason, fraudsters intentionally seek out non-EMV enabled businesses because the transaction process is not secure, and they can use the counterfeit magstripe card successfully, bringing unwanted chargebacks to your business.