This year, banks and credit card companies are sending consumers new payment cards, which look the same as typical cards but contain a high-tech metallic chip known as EMV, in an effort to make credit card transactions more secure.
EMV stands for Europay, MasterCard, Visa – the three companies that created the standard, according to ABC News. Retailers who haven’t upgraded their credit card networks will be liable for any Visa, Discover or MasterCard credit card transactions that are fraudulent if the card is EMV-equipped, the ABC News article explains.
For small business owners, converting to the new technology can be overwhelming and expensive, according to the National Retail Federation (NRF). The new chip card terminal can cost as much as $2,000 when installation, software and other expenses are included.
In the NRF article, Keith Lipert, owner of a three-employee store in Washington, says EMV cards being issued in the U.S. are chip-and-signature cards, which aren’t as secure as the chip-and-PIN cards used in nearly every other country using EMV technology.
Federal Reserve statistics show using a secure personal identification number to approve transactions is seven times more secure than an often-illegible signature, Lipert says.