Are you seeing more chargebacks? You need EMV

Chargebacks are always on the minds of business owners. As we’ve covered before, reports of friendly fraud are on the rise in some industries, and for any merchant that’s faced an increase, it’s a major problem that needs an immediate solution. After all, it’s not just high-ticket items like electronics anymore – instead, even unconventional industries like quick-serve restaurants have seen an increase in chargebacks recently.

But in card-present situations, there’s one simple, major strategy to avoid chargebacks: Accept EMV cards.

EMV Is The Best Solution
Even as EMV adoption grows and the sight of “swipe-only” terminals becomes increasingly rare, there are still holdouts among merchants that only accept magstripe. And these holdouts are more and more frequently being focused on by fraudulent criminals who need “soft targets.”

As a result, friendly fraud is on the rise, and it’s leading these EMV holdouts to face more chargebacks. Many of these merchants were not fully aware of the extent to which fraud was occurring before the EMV changeover in 2015—at that point, liability for fraud fell to the card issuers.

But after the EMV changeover, those merchants who did not accept EMV became accountable for the fraud. And because previously there was no transparency into the level of fraud, many were surprised at how many chargebacks they now faced.

As those merchants quickly pursued EMV, merchants with items of smaller ticket sizes were then holding a target for fraudsters—and now they, too, are experiencing higher chargebacks.

The EMV Liability Switch
So why does EMV prevent chargebacks? Think back to the EMV switch in October 2015. Before then, issuers were responsible for the funds taken during fraud. Now, merchants are on the hook for the fraud if they don’t have EMV.

But once they do have EMV, the liability goes back to the issuers. It’s that simple.

Companies that still are holding out on EMV and have experienced an increase in chargebacks have a simple road to greater security and minimal fraud: start accepting EMV. Visa has estimated that fraud is down 76% among merchants using EMV, and beyond only that, your friendly fraud chargebacks will return the liability back to the issuer.

Not everything is a simple fix in payments, but if you don’t have EMV and you’re experiencing chargebacks, this one is: Begin taking EMV. And as the run-up to the holidays begins, companies need to make the switch well in advance of one of the busiest and most crucial seasons of the year.

​​How EMV Helps Prevent Chargebacks

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