Why Your Small Business Should Never Key in a Chip Card

January 26, 2017

A lot of small businesses are still struggling with the chip cards that came out a couple of years ago across the U.S. There are still questions and people can easily fall victim to fraud.

In our industry, we have a lot of merchants lose some money due to the switch to EMV technology by not recognizing the best procedures when dealing with the new technology.

One of the biggest mistakes we see small business owners make is trying to manually enter in a chip card.

If you skip through this blog, at least take this piece of advice.

You should never ever key in a face-to-face transaction without checking ID.

Common occurrences of face-to-face fraud.

Unlike online, EMV is supposed guard against cards being compromised by creating a more secure barrier over the traditional magnetic strip of a credit or debit card. However, a lot of merchants can still run into risks of EMV with a face-to-face fraud if they don’t know the signs.

A common reason merchants fall victim to fraud via EMV comes from a customer swiping their card, and the merchant’s EMV terminal flashes a message to insert the chip, but there’s no chip on that card. If this happens, it’s because someone has taken the card number information from a chip card and made a counterfeit card.

If this happens, the only way to proceed is to ask for identification. Check their ID with the name listed on the card. If they don’t have an ID, do not continue with the transaction. Unless it is a regular and you have known them their entire life and are sure they have not been cloned, don’t do it.

If your card reader is asking for you to insert the card and there’s no chip, it’s a counterfeit card. And eventually, you’ll get a chargeback for fraud, and be completely liable for it.

Closing thoughts.

Avoiding situations like the one above comes with training. Some simple steps you can take to prevent losing money involve checking the person’s ID to make sure it matches the card. If worse comes to worse, it’s better to have your staff ask for an alternative form of payment if your credit card machine is telling you something is fishy.

Remember even though face-to-face fraud is not as likely as online fraud, you should still work with your staff to put procedures in line so this situation doesn’t happen to you.

EMV is a step in the right direction, however, it’s not the end game for fraud. Thieves will continue to learn how to beat the newest security. It’s always going to be a rat race, but your business can still protect you by working with your credit card processor.

Have questions about EMV?

Download our free EMV guide to see how EMV affects your business.

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