October is right around the corner, and that means that we're coming up on the one-year anniversary of the EMV card deadline. Since last fall, business owners have been required to use EMV technology to avoid liability costs for counterfeit card transactions. Instead of using the familiar magnetic stripe, EMV credit cards use an enhanced security computer chip that communicates directly with the card issuer.
Though the latest payment technology fights off cybersecurity threats, many business owners still haven't made the switch. According to a Manta poll, just 8 percent of small business owners had adopted EMV ahead of Oct. 1 last year, while 28 percent didn't know how the change would affect them.
What's holding business owners back from adopting EMV chip technology? For many, it comes down to the cost, lack of support and time associated with implementing a new system. While updating your payment technology comes with its fair share of challenges, for small business sellers, the costs of upgrading are negligible compared to the alternatives. An out-of-date payment system can result in a lower sale price, a weaker negotiating position, immediate financial risk and a longer time on market.
When armed with the latest technology, sellers can better market their business as it requires fewer up-front investments for prospective buyers. Updated payment technology also reduces the risk of financial liability for prospective business buyers, and demonstrates that your company adheres to the latest technology and security best practices. That's why sellers, particularly those in the retail industry, should ensure their payment technology is updated and meets all regulatory requirements before listing their business.
Here are some tips for making sure your payment technology is updated and attractive to buyers:
- Evaluate your current point of sale (POS) system: It's essential to run an assessment of your current POS system since the path to compliance is different for every company. Depending on your existing system, you might need to update the hardware, software or both, or replace the entire card terminal.
- Consult your merchant processor or look for EMV-equipment: Once you have an understanding of which components of your system need updating, it's time to find new payment processing equipment. The best and most efficient way to identify EMV technology that's right for your business is to simply contact your processor and ask which systems they recommend and how much it'll cost. If you don't have a merchant processor, make sure to give yourself plenty of time to research EMV hardware before making a purchasing decision. This way, sellers can ensure they're leaving their buyer with strong (and compliant) payment technology.
- Set a timeline and budget for making updates: Once you have the necessary resources to become EMV compliant, establish a budget, a deadline for rolling out new payment technology and training schedule. Some vendors may allow you to spread out the costs as a way to make the switch more affordable. Having EMV-trained employees can be a major selling point, so business owners looking to market their company can certainly benefit from offering training.
- Consider going mobile: Updating your payment technology to accept mobile payment is a way to accommodate customers' changing habits and provide a modern appeal to buyers. Americans are increasingly paying electronically (with cards and phones) instead of with cash and check. In fact, a Nilson Report predicts that by 2018 the volume of cash payments will decrease by 24 percent and the number of check payments will fall by 46 percent. When upgrading your payment system, consider one that integrates with smartphones or other mobile devices like an iPad. Another option is deploying a system that accepts both contactless mobile payments and EMV chip cards.
At this point in the game, every business should be working on migrating their point-of-sale systems. Fraud liability can devastate a small business, especially those looking to sell in the near future. Implementing new payment technology can give sellers some peace of mind as they prepare to list their business. By making your business EMV compliant, you'll ultimately attract better buyers while dodging fraudulent charges in the meantime.