EMV and Apple Pay for Your Business

EMV and Apple Pay Benefits

Europay, MasterCard, and VISA (EMV) have been a standard payment method in Europe and Canada for the past decade. Since its implementation, credit card and POS fraud has decreased significantly. When an EMV card is used, a microprocessor creates a unique code for every transaction to make it difficult to steal card numbers. The USA is currently transitioning.

In October 2014, President Obama signed the “Buysecure”, an executive order to speed EMV adoption in the US. The transition to EMV in the US has been slow. Below is a list of current global EMV terminal adoption trends:

  1. Western Europe: 99.9%

  2. Canada: 84.7%

  3. Asia Pacific: 71.4%

  4. USA: 0.03%

    1. 47% of credit card fraud comes from the USA

Credit card companies and lawmakers stated in early 2014 the US would make a transition starting October 1, 2015. After this date, businesses without EMV hardware will be liable for fraudulent, in-person payments. In 2015,  575,000,000 credit and debit cards will be reissued in the US due to this shift. Although still hackable, EMV’s prevent the growth of fraud due to their microprocessor chip that stores and protects cardholder data safer than magnetic strip cards.

In 2014 Home Depot, Michaels, Neiman Marcus, and many other retail stores experienced system breaches which resulted in millions of customers data being stolen. This breach was a call for a more secure payment method. Obama spoke at the Consumer Financial Protection Bureau about the transition to EMV saying, “the goal isn’t just to ensure the security of doing retail business with government but also through the increased demand, to help drive the market towards swifter adoption of stronger security standards”. Home Depot, Target, Walmart, and Walgreens promised to start activating EMV terminals by January 2015 and American Express and VISA have pledged to begin programs to change small business owners and consumers to EMV in 2015.

Apple Pay is a digital wallet/mobile payment service offered by Apple Inc which allows its’ users to make payments using an iPhone 5 and later models. It also allows its users to use an Apple Watch, iPad air 2 and mini 3 to make payments. Apple Pay creates a digital replacement for credit and debit card terminals and allows Apple devices to wirelessly communicate with POS systems using a near field communication antenna, that stores encrypted payment data and Apple’s Touch ID Passbook.

Apple Pay secures customer payment data privately from retailers and creates a “dynamic code generated for each transaction.” It doesn’t track usage which will stay between the customers, vendors, and banks. If you lose your iPhone, use the “Find my iPhone” app to haul Apple Pay on your device. Users can add their participating financial institution to Apple Pay and still reap the benefits from them. Financial institutions marketed individual Apple Pay campaigns for consumers to join them as their default choice. Click here to see if your bank participates in ApplePay.

How To Use Apple Pay:

  • Hold the authenticated Apple device to the POS system

    1. authenticate by holding fingerprint to the phone’s Touch ID Sensor

    2. Apple Watch users double click a spot on the device

Apple Pay comes at the right time when the US’s shift toward EMV payment standards are being initiated. The EMV hardware allows for contactless payment capabilities that Apple Pay uses. The EMV transition is only going to increase the use of consumers using Apple Pay.

Benefits of Apple Pay

  1. Increased security and privacy for your consumers

  2. Mainstreaming mobile payments provides an additional opportunity to compete

  3. It’s convenient in that there’s no need to wait for a waiter/waitress at a restaurant because you can pay when you wish on your mobile device

  4. Convenience will lead to happy customers and happy customers will return to your establishment

  5. Market to past consumers directly to their mobile device with weekly updates or specials