My business does not do a high volume of credit card transactions except at speaking events and trade shows. Yet I chose to make a significant investment this week to protect my firm from liability related to credit card fraud. The investment was not significant from a dollar amount, but from a perspective of managing risk it was essential.

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If you have a card swipe system (Square, QuickBooks, or terminals) then you will have liability beginning October 1, 2015. The new technology requires inserting the credit card so that the machine can read the microchip embedded in the card, not the magnetic strip. These EMV® cards have been the standard in Europe, but have now been implemented in the United States as one step to reduce the rising trend in credit card fraud resulting from breaches at retailers and other businesses that have been hacked, as well as fraud resulting from theft of individual cards and card numbers.

So what does this mean to you and your business? If you do not have devices that require the insertion of the card rather than card swiping, then liability for fraud may rest on your business. Historically, credit card fraud using counterfeit, stolen, or otherwise compromised cards fell back on the payment processors and banks (the card issuers). Effective October 1, 2015 (note if you own a gas station with automated fuel dispensers you have until 2017 to make the change to EMV compliant equipment) credit card fraud will rest on whoever is the least EMV-compliant party in the credit card transaction. So if your systems are magnetic card /swipe systems, that is likely to be you.

Check your credit card agreements for updates related to the upcoming shift in liability. Each credit card companies have disclosed their scheduled about the shift in liability.

But don’t panic yet. October will likely have 50% or fewer retailers (and others that accept credit cards) in compliance. Many larger grocery stores and other retailers do not have equipment in place for all outlets. So what do you need to do?

If you have in-store/physical terminals, contact the company from whom you rented/leased or purchased them to discuss your options and costs. If you have a credit card processing vendor, give them a call to have a conversation about making the shift to EMV. If you use devices attached to your smart phone or iPad (e.g., Square, QuickBooks) then you should be receiving an email or other communication from these companies to order an EMV-compliant device.

Devices like the Square run $49. Terminal upgrades can range from $200 to $600 according to credit card industry statistics.

The first step to making this transaction is being aware that it is happening. Second, determine your risk and the cost of changing over your business systems. Third, develop your plan including budget and timeline to make the conversion.

©2015 Lea A. Strickland, MBA MA CMA CFM CBM GMC, F.O.C.U.S. Resource, Inc.

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