Has your pharmacy upgraded to an EMV-enabled point-of-sale system?
On Oct. 1 2015, liability for fraudulent transactions that occur when an EMV-enabled card (also known as a chip card) is used on a stripe card reader shifted from banks and credit card companies to retailers. The Payments Security Task Force estimates that 98 percent of all credit and debit cards in the U.S. will contain EMV chips by the end of 2017.
Despite the increase in liability and the growth in popularity of chip cards, many retailers have not yet adopted the new technology to accept them. Some have put off upgrading because of the initial cost of investment. Others have heard that upgrading will cost them time and convenience at the checkout counter because EMV card readers take longer to process payments.
But, waiting to incorporate the latest card reader technology could actually be costing your pharmacy—in more ways than one.
Here are four ways not updating is costing your business.
1. Not updating can cost you: Cash-paying patients
If patients can’t use their more secure chip cards on your pharmacy’s machines, they might be tempted to find a pharmacy that takes their financial security more seriously.
If you can only process magnetic stripe cards, you’re putting patients’ bank, card and account information at risk. The information stored on stripe cards never changes, which makes it easier for hackers to extract account information or copy the stripe onto a fraudulent card. EMV cards are more secure because they create a one-time code for each transaction. The code can’t be reused, so it’s useless even if it’s copied or stolen. And, the data is encrypted both on the chip and at the EMV reader, adding an extra layer of security.
Not upgrading could cost your pharmacy cash paying patients who would rather opt to shop at a pharmacy that has a more up-to-date and secure payment method.
2. Not updating can cost you: Greater fees
Chargebacks, or the cost of fraudulent charges, is growing quickly for retailers that haven’t upgraded to EMV-enabled card readers, according to a May 7 Wall Street Journal article.
Upgrading can help protect your pharmacy from incurring these fees by transitioning the liability back to banks and card issuers. If you don’t upgrade, you could be on the hook for fraudulent transactions, and, according to the Wall Street Journal article, some experts estimate that these chargebacks will cost retailers tens-of-millions or more.
3. Not updating can cost you: Security
You’re liable if, somehow, your patients’ payment information is breached after processing an EMV card on your pharmacy’s stripe terminal.
Security breaches due to out-of-date card readers are on the rise among small and medium-sized merchants. Chargebacks for small and medium-size merchants rose 15 percent in the fourth quarter from a year earlier, according to a survey from The Strawhecker Group, a payments consulting firm. The survey also found that fraud is more likely to occur in small or medium-sized merchants, such as your independent community pharmacy, than in big merchants.
By not upgrading to an EMV card reader, you’re costing your patients their sense of financial security, and you’re jeopardizing your pharmacy’s own financial security, because you’ll be on the hook for the cost of any breaches.
4. Not updating can cost you: Your modern reputation
If your payment technology is behind-the times, patients might worry what else might be lagging at your pharmacy.
If your technology is out-of-date, you risk patients assuming that your approach to their care or your expertise is also outdated. This could lead patients to switch to a pharmacy that they consider to be more up-to-date.
Not upgrading can cost your business the modern, cutting-edge image and reputation you’ve likely worked hard to establish.
Are you considering adding new technology to your pharmacy? Use this guide to help you determine if the upgrade is right for your business.
