Time to stop dragging your merchant feet. An EMV credit card processing equipment upgrade is on the docket, and although US credit card issuers have been slow to get chip cards out there – I assure you – they’re coming. In addition, major card brands are pushing EMV implementation with cost incentive to merchants as well as a liability shift.
What’s the shift and why? Covered. See our April 2013 blog for the ditty on the details. Liability shift for fraudulent transactions run on non EMV compatible terminals will become the responsibility of ….you, the merchant – effective October 2015. Currently, the financial responsibility for a fraudulent card transaction (think stolen) was that of the card issuing bank – but no more.
What’s an upgrade to an EMV ready terminal or equipment going to cost me?
One of the biggest misnomers I see out there, time and again, is the upgrade costs. Okay – if you’re Target or Walmart – could get a little pricey. But the reality is – for a small merchant looking for a basic EMV terminal – this is not a capital equipment purchase folks. XBS has long been installing EMV ready credit card processing terminals at wholesale costs to assist our processing merchants. Combine this with a $100 rebate offer from American Express – and cost should not be preventing your upgrade.
Last week we blogged about how merchants love to hate American Express. Still, we drummed up some oft overlooked company pros that we think merchants overlook. Right now for instance – Amex has an incentive program for their small merchants to upgrade to EMV compatible equipment. Small merchants = less than $3 million in annual Amex volume (this is many of you), can receive a $100 prepaid Amex gift card when proof of purchase for the EMV upgrade is submitted to the card brand by April 30th – 3 weeks! If it has to be done – and it does – may as well take the $100 discount - am I right?
Finally – besides the “risk”, (which should be enough) - what’s the cost if the merchant doesn’t upgrade?
In recent years, in retail circles, we’ve met many a merchant whose ONLY focus is cost when it comes to credit card processing. Keeping overhead costs low is resourceful strategy in business of course – but not the only one.
I couldn’t help but compare this cost/expenditure dilemma for our retail merchants to our B2B clients, during a read in Industrial Engineer – Lean is Not Cheap. In manufacturing, and many industrial environments, Lean is quite simply, a systemic approach to eliminate waste, reduce costs, and improve quality (sounds good doesn’t it?!) The article was literally a case study of a successful global manufacturer overwhelmed with excess inventory...”money parked on the shelf that otherwise should be reinvested” according to the CEO.
The solution from global operations, after an intense week long gathering of all departments, shared data, examination of customer service levels and the supply chain, and even job swaps? Established principle, “that managing the company’s “cost to serve”*, is not always about making everything cost less.”
Maybe sometimes – we have to look at the “big picture.” Seriously.
*Cost to Serve is a process-driven accountancy tool to calculate the profitability of a customer account, based on the actual business activities and overhead costs incurred to service that customer