By alphacardprocess August 3, 2025
EMV readers assist small stores in combating fraud by introducing additional security to each card transaction. Unlike outdated magnetic stripe technology, EMV chips generate a new code for each transaction. Thus, it is significantly more difficult for fraudsters to duplicate card details or make duplicate cards.
How EMV Cards Work
EMV cards operate by adding additional security each time someone pays. When a customer inserts their EMV chip card into a payment terminal, the chip generates a one-time code just for that transaction. This results in sensitive card information not being transmitted directly, which makes it much more difficult for fraudsters to steal information.
Companies were forced to adopt EMV-compatible machines when the regulations changed in October 2015. Although it did cost them initially to upgrade hardware, it does shield companies from chargebacks and fraud in the future and makes payments safer for all.
Why Small Businesses Must Be EMV Compliant
Small businesses simply can’t afford to overlook EMV compliance anymore. As much as it may seem more convenient to continue using outdated card readers, EMV Non-compliance can cost them fines, increased liability, and a great risk of losing customer trust if there’s fraud.
Old magnetic stripe cards keep the same information for each transaction, making it easy for hackers to duplicate and utilize the card information repeatedly. EMV chip cards, on the other hand, employ sophisticated technology to generate a brand new, one-time transaction code with each purchase. Even if someone succeeds in stealing that code, they can’t use it.
How EMV Keeps Your Business Secure
Using EMV technology can protect your business from fraud and chargebacks. Before EMV, if someone used a stolen card, your business often had to cover the cost. Now, if your payment terminal accepts EMV chip cards, you’re not held responsible for fraud if the card was reported lost or stolen.
But if your terminal can’t accept EMV cards and you do swipe the magstripe instead, your business may still be liable for fraudulent transactions. That’s why keeping up with your systems is important.
These changes were implemented to guard everyone involved, from customers to merchants and banks. Mastercard and Visa studies reported significant declines in fraud at shops that utilize EMV. Simply put, having EMV makes your transactions more secure and shields your business from surprise expenses.
Can EMV Fraud Still Occur?
The short answer is yes — EMV cards will prevent fraud, but they’re not perfect. EMV technology operates by employing a small chip on your card to generate a unique code each time you use it at a payment terminal or ATM. This makes it extremely difficult for an individual to replicate your card or use payment information.
But criminals can still attempt to steal your data in some ways. For instance, EMV chips don’t cover card-not-present transactions, such as when you buy online or provide your card number over the phone. Since you’re not inserting the chip, that extra security doesn’t trigger, so you still have a risk of fraud in those situations.
Although EMV chips provide a powerful layer of security, some fraudsters always seem to find a way around them. Below are some of the tricks that they employ, put in plain language
EMV Bypass Cloning
Fraudsters employ special devices to deceive the payment terminal during this scam. Rather than reading the chip, the machine is manipulated into applying pilfered data from the magnetic stripe on the card.
Shimming
This is similar to skimming. Thieves insert a very thin piece of equipment (known as a shim) into the card slot to steal information from the chip. Although the encryption of the chip makes this difficult, it can still result in fraud.
Fallback Fraud
Fraudsters may even intentionally destroy the chip so that it can no longer be read. The payment terminal then “falls back” to scanning the magnetic stripe, which is simple to duplicate. In this way, the fraudsters can make purchases.
Card-Not-Present (CNP) Fraud
EMV chips only help defend against in-person transactions. When purchasing over the phone or online, the chip is never utilized, making it simple for criminals to utilize stolen card information.
Data Breaches
When hackers invade a store’s system, they can acquire personal information and transaction data. Although the chip itself remains safe, it can be used for internet fraud with these stolen details.
Phishing
Scammers send impersonated emails or create websites to convince individuals to divulge card information. Although this does not hack the chip, it evades its security by attacking the user instead. All these examples demonstrate that although EMV chips reduce fraud, businesses and cardholders must remain guarded and employ additional security wherever possible.
Impact of EMV Fraud on Ecommerce Merchants
EMV fraud can lead to actual problems for e-commerce merchants, impacting their finances, reputation, and even legal problems. Financially, merchants frequently pay for fake transactions in the form of chargebacks, where money gets refunded to the customer. These losses accumulate fast and tend to be accompanied by additional payment processor fees, which can hurt revenue.
Apart from money, fraud also harms trust. When shoppers hear of fraud at an online retailer, the merchant’s reputation is tarnished, and customers are less likely to shop there again. Complaints and bad reviews have a way of spreading rapidly, making it difficult to recover customer trust.
Legally, EMV fraud can also bring significant issues. Traders can be fined or punished if they fail to comply with security guidelines and regulations. At times, they can even be required to reimburse affected consumers.
Additionally, if a data breach occurs, there can be additional legal obligations under data protection regulations. Altogether, EMV fraud demonstrates the importance for online businesses to remain vigilant and invest in robust security measures.
EMV Liability Shift and Ecommerce Merchants
EMV liability shift is a significant shift that all e-commerce merchants need to be aware of. Simply put, it shifts who pays when there is fraud in card-not-present (CNP) transactions, such as online purchases where the customer does not physically appear.
Previously, the cost was covered by the card issuer in cases of fraud. But now, when a fraudster is using an EMV chip card and the merchant’s payment system is not EMV-compliant, the merchant may be held responsible. In order not to end up with these expenses, eCommerce companies must ensure that they’re implementing EMV-enabled payment systems.
This involves upgrading their payment gateways and ensuring their systems accept EMV chip card information securely. Complying with EMV standards reduces the likelihood of fraud, ensures customer payments are secure, and saves the business time and money on expensive chargebacks and other issues. It’s all about remaining secure and compliant to protect the business and its customers.
Five Advantages of Migrating to EMV Technology for Your Small Business
Migrating to EMV technology is beneficial in many practical ways for small businesses. For one, it reduces the amount of fraud through the utilization of chip cards that generate unique data for each transaction, rendering it much more difficult for thieves to duplicate card information.
This additional layer of protection not only safeguards your money, but it also safeguards customers and gives them peace of mind when shopping from you. As more individuals become accustomed to chip cards, they will look for this added security. EMV use can also help your business avoid chargeback costs and legal troubles associated with certain fraudulent transactions.
In addition to security, it safeguards your reputation by demonstrating to customers that you care about their data safety. Finally, At the same time, the EMV upgrade may appear costly, some cost-saving funds and programs can offset its expense.
What Tools Do You Need to Accept EMV Chip Cards at Your Store
Making your store accept EMV chip cards is less complicated than it seems. For customers, it’s easy—just a credit or debit card with a chip is needed.
For merchants, you’ll require a credit card accepting machine or reader capable of reading EMV chip payments. The plus point is that you don’t need to purchase multiple different machines. The majority of EMV readers still retain a magnetic stripe slot for traditional cards and usually also feature NFC technology, meaning you can also accept contactless payments from chip cards or mobile wallets.
Even better, you don’t always need to have a large, stand-alone point-of-sale terminal. Many devices enable you to use your smartphone or tablet as a secure EMV and contactless payment terminal. This is easy and economical for small companies to implement chip card acceptance with minimal additional hardware.
EMV Fraud Prevention Tips for Ecommerce Merchants
To secure your e-commerce site against fraud, consider implementing EMV-compliant payment systems, which are compatible with chip cards and provide more security than traditional magnetic stripe cards. Installing tools such as tokenization also comes in handy—it substitutes card numbers with random tokens, so even if information is stolen, it can’t be utilized.
Two-factor authentication (2FA) is also a solid layer of protection, requiring customers to verify their identity using something they have and something they know, such as a password and a one-time code.
An Address Verification System (AVS) is also something that can be used to ensure the billing address is the same as that stored on file with the card issuer, making it easier to catch fraudulent transactions. Advanced fraud detection software scans for suspicious activity and notifies you before confirming risky payments.
Educating your customers and staff about signs of fraud makes everyone more cautious, while strict password policies promote secure logins. Lastly, performing periodic security audits enables you to identify and address vulnerable areas before they are compromised. Altogether, these processes secure your company and your customers’ trust.
Types of EMV Chip Readers
There isn’t a single ideal EMV chip reader for all businesses—different tools will be best for different businesses. Contactless EMV readers allow the customer to easily tap their card or phone to make a payment, often for smaller purchases.
They’re convenient, quick, and perfect for busy stores like cafés. EMV readers allow the customer to insert their card and enter a PIN code. This is typically used for larger purchases or to provide additional security.
Finally, there are EMV readers for mobiles, which are used in combination with smartphones and enable companies to accept secure payments wherever they are. These are great for acceptance with Apple Pay, Google Pay, and cards, providing customers with more freedom and flexibility and keeping payments secure.
Types of EMV Chips
There are primarily two varieties of EMV chips that companies use to make payments. Chip and PIN is the first step, where the customer will insert their card into the EMV reader and enter a four-digit PIN to authorize the payment. If the PIN is correct, the payment is processed securely.
The second is chip and signature, where upon insertion of the card, the customer signs a paper receipt. The shopkeeper then verifies whether this signature is the same as that on the back of the card before accepting the transaction. Both these methods provide additional security to card transactions, but operate differently.
How to Choose the Right EMV Terminal
Whether it’s a busy café, a market stall that’s open only on weekends, or a retail business, choosing the right EMV reader is crucial for hassle-free and secure payment.
First, think about the number of transactions you execute each day. If you deal with lots of payments, then a countertop terminal with fast speeds might be best. For smaller shops with fewer sales, a simple mobile reader or PayPal card reader can do the job without any extra cost.
Then, consider whether your business is constantly on the go. Mobile EMV readers that attach to your phone or tablet are ideal for pop-up shops or food trucks. But if you remain in a boutique or grocery store, a fixed countertop terminal is good enough.
Make sure your EMV reader works smoothly with your existing POS system. This makes checkout faster, keeps your sales data organized, and avoids technical headaches.
Security should always be a priority. Choose an EMV reader with features like encryption and tokenization to protect your customers’ card details and safeguard your business against fraud.
Finally, don’t forget about contactless payments. An NFC-supporting reader allows your consumers to tap their cards or use mobile wallets such as Apple Pay and Google Pay for faster and simpler payments.
Conclusion
EMV readers provide small businesses with a more secure method of dealing with payments. By securing transactions and minimizing fraud risk, they both shield your business and your customers.
FAQs
What is an EMV reader?
An EMV reader is a device that scans the secure chip on credit and debit cards. It safeguards against fraud by generating a one-time code for every transaction.
How do EMV readers minimize fraud?
They utilize chip technology to create one-time codes, making it more difficult for fraudsters to clone cards or steal information.
Can small stores utilize mobile EMV readers?
Yes, mobile EMV readers are perfect for small stores, pop-ups, and sellers who have to take secure payments on the move.
Do EMV readers support contactless payments?
Most newer EMV readers include NFC, where customers can pay fast by tapping cards or phones.
Are EMV readers difficult to set up?
No, the majority of EMV readers are simply designed to integrate seamlessly with your current POS system or smartphone, so installation is uncomplicated.