Small Merchant Guide to EMV
As the October 2015 migration date for EMV approaches, the pressure is building on small merchants in the U.S., according to Tim Russo, fraud team leader at cleverbridge.
While EMV is already the norm in Europe, “smaller banks and acquirers [in the U.S.] aren’t ready for this type of digital authentication,” says Russo.
“We expect our online purchases to be seamless and easy, and the more work that gets placed into it will cause that customer to leave and go to a company that does make it simple,” Russo says. “There has to be a unified agreement on how this type of mobile and digital verification is going to take place so that all issuers and acquirers can get on the same page.”
Cleverbridge is a full-service global ecommerce provider for software and cloud companies. Russo says the company is continuously optimizing and tweaking its product line to keep up with the ever-evolving smart card environment.
Fraud teams for cleverbridge use a “mix of machine learning and human intuition” to detect fraud, says Russo.
“All orders that are placed by credit cards/PayPal/direct debit are processed through our automated anti-fraud system and if one of our in-house rules are triggered, the order will get investigated by a fraud specialist,” Russo explains.
According to cleverbridge, while smart card technology strengthens security for brick-and-mortar purchases, in a card-not-present environment (think shopping online) … not so much.
Here are three strategies that Russo says smaller merchants, smaller banks, issuers and acquirers can put in place as they make the transition to EMV.
Start now
Smaller merchants should call their processor or acquirer to make sure they have the technology to accept chip-and-pin and be ready for card-present situations.
“Do not wait until the last minute, otherwise you could be on the outside looking in until you get the technology,” Russo warns. “VISA and MasterCard have placed liability on merchants for chargebacks for those not equipped to take EMV technology.”
“If you deal with CNP (card not present), digital goods and/or ecommerce, you should be having conversations now with the companies that process your transactions,” Russo urges. Important questions to ask are if they are prepared, if 3D Secure is an option and the best way to make it as seamless as possible for the user, as credit card fraud will be shifting to online and CNP environments.
Do your homework
Become familiar with the EMV information provided by Visa and MasterCard concerning this shift. Russo believes this should be “required reading for any type of merchant” – card present or not.
Know the key players
Lastly, merchants should speak with and build relationships with the companies that handle their payments, fulfillments and transactions.
“The best thing any company can do is know what is going and who is handling what so that they can feel comfortable with the process working for them,” he says.