How can small businesses combat EMV chargebacks?

1. How to Combat EMV
Chargebacks

2. • Now that the EMV liability shift has passed, many
merchants who still have not adopted EMV technology
have complained about experiencing an increase of
chargebacks for their business.
• The reason for these significant increases of chargebacks
is still not fully clear.
How to Combat EMV Chargebacks

3. • One network reported that out of 250,000 merchants,
there was an increase of card-present chargebacks by
50%.
• Some experts believe consumers are abusing the
chargeback system, while credit card companies feel this
increase is common and comparable to what other
countries experienced with the emergence of EMV.
How to Combat EMV Chargebacks

4. • Because of this increase, some merchants have begun to
sue issuers and networks, declaring they did not have
enough time to integrate EMV solutions nor were they
cautioned of the costly fines involved.
How to Combat EMV Chargebacks

5. • Larger merchants especially do not want to have to go
through the lengthy process of training customers how to use
their chip cards at their upgraded terminals.
• On a similar note, switching to EMV-capable terminals is a
large and expensive project that even larger merchants do not
want to hassle with.
Why the Delay?

6. • On the other hand, card companies maintain the stance
that merchants have had five years to make the switch to
EMV capable products and should have complied by the
liability shift.
Why the Delay?

7. • However, some merchants who met the liability shift and
upgraded their terminals are continuing to face delays
from processors that are still not EMV-ready.
• This delay of EMV software could be caused by stricter
EMV installation guidelines recently issued by VISA and
also in part due to a lack of technical expertise from the
merchant.
Why the Delay?

8. • As the payments industry continues to sort out the EMV
issues, merchants can avoid the possibility of
chargebacks by understanding the regulations of EMV.
Why the Delay?

9. • Here are some key facts merchants should recognize:
– Merchants should not be held accountable for chargebacks that
occur on valid, non-fraudulent cards not containing a chip.
– Merchants who lack EMV-capable terminals are now at a higher
risk for instances of fraud, as criminals are avoiding merchants
that have EMV, as these terminals are harder to compromise due
to heightened security features.
– Merchants are held liable once a card is swiped. If there is a
dispute or fraud involved, the merchant will be held responsible
for losses, not the bank.
Key Facts about Chargebacks

10. • The most efficient way to avoid EMV chargebacks can be
done by processing transactions correctly. Be sure to
follow these rules:
– Always swipe non-chip cards and never manually enter in
account numbers.
– If you have to manually enter in card numbers, use the security
code, notice the expiration date, and take an imprint if possible.
– Do not key or swipe in a chip card. This offers zero protection.
– Process chip cards correctly by inserting them inside the
terminal.
– Do not override or swipe a declined chip card. Instead, ask for a
different form of payment.
How to Avoid Chargebacks

11. • Although chargebacks have been an issue within the
payments industry for decades, the start of EMV
technology has increased this problem for merchants.
• Thankfully, merchants can lessen their chances of
experiencing a chargeback by adopting EMV technology
solutions and following the regulations to process a
proper transaction.
How to Combat EMV Chargebacks

12. Did you miss the EMV liability shift date?
Contact First American Payment Systems and get started with EMV
today!