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MANAGING RISK: Liability Shift

Chip and PIN cards utilize a computer chip embedded in the card. Rather than swiping the card, the consumer inserts the card into a point of sale terminal and then enters a 4-digit personal identification number. The process has proven to be more secure than magnetic strip technology—hackers and the black market have found ways to read the magnetic strip and steal the card’s information but have not been as successful when it comes to Chip and PIN tech.

Moving to Safety

Hamilton Building Supply in Hamilton, N.J. hasn’t wasted any time in updating its systems. The company purchased new EMV-capable hardware through Epicor at the end of 2013, according to Hamilton’s purchasing manager Rick Howard.

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At a cost of roughly $1,000 per terminal, Hamilton has already installed new terminals at 15 payment stations. Howard says the dealer installed the terminals themselves, which provided some cost savings to the overall project.

“We’re ready and this should keep us out of trouble in the event of fraud,” Howard says. “This is something that we are wary of and scared of.”

During the past year, Epicor has been offering a variety of webinars and customer meetings to update customers to the impending changeover in systems. On top of this, Epicor is also providing tutorials and training classes to explain the deployment of new technology, the company says.

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“Epicor is working with suppliers, processors, and our customer base to ensure that updated hardware and software
will be available to our customers to support the EMV rollout and to make our customers knowledgeable of the liability shift requirements,” Doug Smith, senior product marketing manager for Epicor Eagle, told LBM Journal.

Smith says he believes that the new technology should be a strong deterrent against future customer data crimes.

“Jurisdictions that have adopted Chip and PIN or EMV technology have seen a dramatic decrease in fraud,” Smith says. “EMV’s dynamic authentication technology offers increased security for payment processing over the older mag stripe technology.”

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“It’s more difficult to clone the card; it’s more difficult to make copies of existing cards,” Ehinger says regarding the new system. He also says Do it Best Corp. has already sold hundreds of terminals to members.

Although Do it Best Corp. negotiated a fairly inexpensive price with its vendor for the standalone terminals—about $300 apiece—dealers who have fully integrated point of sale systems must purchase them through their POS provider. Do it Best Corp. is in the process of coordinating and finalizing additional cost savings for its members who are going through the conversion, the co-op says.

In preparing for the change, Do it Best Corp. has provided members with updates via newsletters, the member website, and presentations at its May and October Markets. “We’ve been preparing for more than a year,” Ehniger says. Experts on PCI compliance and EMV technology have been present at the Do it Best Corp. markets as well.

“We are doing whatever we can through mailers, our internal site, seminars and training events to make sure members understand the implications,” Ehinger explains.

“It’s not that you have to switch, but you really, really want to,” he says.

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