Beware of the EMV Non-Acceptance Fee

If you’ve noticed an “EMV Non-Acceptance Fee” on your monthly statement, you’re probably searching for answers. My company doesn’t penalize merchants who have not adopted EMV chip card technology, but I recently learned that a major credit card processor does, and it’s likely that others will soon follow suit. They call it an “EMV non-acceptance fee.” Here’s what you need to know.

A Quick Refresher on EMV

As a reminder, October 2015 marked the time when liability for transactions made with counterfeit cards shifted to businesses without EMV chip card technology in their POS systems or card terminals.

As of June 2017, Visa reported that 2.3 million merchant locations accepted chip cards. Despite the rapid growth in EMV adoption, 50% of U.S. storefronts still do not accept chip cards.

More About the EMV Non-Acceptance Fee

To motivate such businesses to adopt EMV, many payment processors continue to educate their customers on its benefits. The primary benefits include fewer chargebacks and the ability to support new payment methods such as Apple Pay.

When business owners don’t bite on these “carrots,” some payment processors apply a “stick” approach. I mentioned that a major credit card processor started charging an “EMV non-acceptance fee.” They will charge their customers who do not accept chip cards a $299 fee on their November processing statement.

While Clearent strongly encourages its customers to adopt EMV, we do not assess a fee.

3 EMV Adoption Obstacles

Below are a few common reasons why businesses haven’t adopted EMV. Let’s address these reasons, along with solutions to these objections.

1.) Inertia
Some business owners may not have a specific reason for not adopting chip cards. Perhaps they don’t understand the benefits, or don’t believe the risk of chargebacks is high for their business. Maybe they live by the old saying, “If it ain’t broke, don’t fix it.” Either way, EMV just isn’t high on their to-do list.

2.) EMV Transactions are Too Slow
Many businesses haven’t adopted EMV because it slows down the checkout process. While traditional magnetic stripe transactions happen in near real time, chip card transactions can take 10-15 seconds. Slow checkout lines can reduce sales and frustrate customers, an unacceptable outcome for most business owners.

To speed up EMV transactions, the payment networks introduced a faster way of processing EMV cards, which is commonly called “Quick Chip.” EMV Quick Chip can be implemented by anyone, but it takes time for the development and EMV certification process.

At Clearent, we recognized the importance of fast checkouts, so we implemented Quick Chip earlier this year. Our customers can get the security benefits of EMV without causing delays at the counter. Check out our Quick Chip EMV card reader.

3.) Upgrading POS is Expensive
Some businesses have refused to adopt EMV due to the cost of upgrading their terminal or point-of-sale system. The costs to upgrade can vary based on the type of POS and number of stations.

For a boutique retailer with a single credit card machine, the cost to upgrade is relatively modest. New terminals with support for EMV and mobile contactless payments can be purchased for just a few hundred dollars.

For a restaurant with a full POS system and three stations, upgrading may cost a few thousand dollars, a much bigger investment.

At Clearent, we offer EMV-ready credit card terminals with a variety of options and price points to make the transition to chip cards as painless as possible. We also offer solutions for POS companies to adopt EMV with a fast integration and no additional EMV certification.

If you want to learn more about how Clearent can help you with the transition to EMV, please contact us.

1https://usa.visa.com/visa-everywhere/security/visa-chip-card-stats-june-2017.html

About Author

Jeff Zimmerman

Jeff Zimmerman

COO

Jeff has 20+ years of product management and operations experience in financial technology, including leadership roles at Network Solutions and Intuit.

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