Ask the Lender? “Should I switch my credit card machine to accept chip enabled cards?”

Jason LaBounty VP Business Banking Officer

Jason LaBounty
VP Business Banking Officer

EMV (Europay, Mastercard and Visa), or chip enabled cards, are common place in most foreign countries and provide a higher level of security against fraud than the magnetic stripe cards seen most frequently in the US. On traditional credit cards, the magnetic stripe holds the information necessary to make a transaction and that information never changes, so if stolen it can be used to make new cards or online purchases. With the EMV card, the computer chip in the card creates a unique transaction code that cannot be used again. According to, “If a hacker stole the chip information from one specific point of sale, typical card duplication would never work because the stolen transaction number created in that instance wouldn’t be usable again and the card would just get denied.”

Until last year, most companies had not felt an urgency to switch to the chip enabled cards simply due to the expense of reissuing cards and trading out credit card machines for upgraded models. Unfortunately, the large breaches we have seen with Target, and then Home Depot, have brought the need for more heightened security for credit cards to the forefront. As of October 15, 2015 if a company that accepts credit card for payment does not accept EMV cards, the liability for any loss will shift to that company rather than the credit card issuer.

For this reason, it is in your best interest to upgrade your merchant credit card machines to accept the newer cards. You will have some initial cost in replacing your machine. Locally the cost to purchase the new machines range between $300 and $500. While not cheap, this investment will insure you do not take the hit for a fraudulent transaction, which could easily exceed the cost of upgrading with just one incident.

If you are interested in learning more about accepting credit card payments at your place of business, contact a business banking officer to discuss our Merchant Services Program.



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