In October of 2015, a new law went into effect that addressed the liability companies will face when consumers are victims of credit card fraud.
According to the Wall Street Journal, the U.S. is the source of almost half of the world's credit card fraud but less than a quarter of the world's credit card transactions.
Most of that is due to the U.S. being one of the last countries to adopt the new EMV cards which contain a chip that makes stealing card information much more difficult. In a world where credit cards have largely replaced money, this had been a needed protection for consumers. It's the reason some stores have asked you to "dip" your card instead of "swiping."
(If you're not completely sure about what this new card technology is, check out this great FAQ from CreditCards.com.)
Businesses are going to be slow to adopt the new terminals. Part of the reason is cost, but many small businesses don't use terminals to process credit card payments. Instead they rely on a payment gateway connected to an internet merchant account provided by a bank.
In a world of shifting liabilities, you need to make certain that your business is protected in case your customers become the victims of credit card fraud through a transaction with you. It will come down to you or the bank being liable, all depending on who does more to protect the customer.
Your insurance probably provides some liability coverage for some credit card fraud, but you want to make sure you're fully protected. If your business relies on swiping the magnetic strip or processing credit cards through your website, you need to be sure your payment gateway is providing the protection you need.
Here are some things to look for in choosing the best payment gateway to protect your business.
Data Encryption – Does it make sure that the information can’t be intercepted and read? This is the minimum level of security the gateway should offer.
Security Certificate – Commonly known as SSL, this is a way of making sure that the information gets where it's supposed to. It combines encryption and authentication from point to point.
CVV2 Verification – Credit cards come with an additional number printed on the back. This is not included in the magnetic stripe, so it makes it more likely that the person using the information has the actual, physical card.
Customer Support – You run your business with your customer in mind. You should expect the same from your gateway provider. 24/7 phone support is optimum.
You have to protect your business, but it doesn't mean purchasing the new point of sale terminals. Check that your payment gateway is providing your customers with the security they need to protect against credit card fraud, and you'll both sleep sounder.