Small Business Owners: How EMV Chip Card Standards Continue to Impact Your Processing Costs in 2024

Nearly a decade after the initial EMV liability shift in 2015, small business owners across the United States are still navigating the complex landscape of chip card regulations and their ongoing impact on credit card processing fees. While the transition to EMV (Europay, Mastercard, and Visa) technology was supposed to be straightforward, many businesses continue to face unexpected costs and compliance challenges that directly affect their bottom line.

Understanding the Current EMV Compliance Landscape

No law requires businesses to be EMV-compliant, but the financial implications of non-compliance remain significant. As of October 2015, if a consumer pays with a fraudulent chip card, and your business isn’t set up with an EMV reader, it’s possible that card issuers no longer have to accept liability. This liability shift means that merchants without proper EMV-enabled terminals could be responsible for the full cost of fraudulent transactions.

The technology works by using EMV chip cards, which contain a microprocessor chip that generates a unique transaction code for every purchase. When the card is inserted into an EMV reader, the chip and reader communicate to authenticate the transaction, making it nearly impossible to replicate the card for fraudulent use.

The Hidden Costs of Non-Compliance

For businesses that haven’t upgraded to EMV-compliant systems, the financial penalties extend beyond fraud liability. Some processors add an “EMV non-compliance fee” if your business does not have an EMV capable system. Our team has seen this fee range from $5.00 – $299.00 a month. Heartland currently charges the most expensive EMV non-compliance fee at $299.00 a month.

Additionally, assessing a ten-cent non-compliance fee on all transactions for merchants with fallback rates of ten percent or more could potentially shutter small and midsize businesses. These seemingly small per-transaction fees can accumulate rapidly for businesses processing hundreds or thousands of transactions monthly.

Real-World Impact on Small Businesses

The consequences of non-compliance aren’t theoretical. Daniel Vasquez, owner of Miami-based Dynamic Auto Movers, says he learned a “hard lesson” after he continued using a MagTek magnetic stripe card reader that wasn’t EMV-compliant. “Many companies are still unaware that if they are not EMV-compliant, fraudulent transactions are directly blamed on them rather than the bank.” Chargebacks ended up costing the company around $15,000, says Vasquez. “On top of that, our processing fees shot up because of the non-compliance,” he adds.

Processing Fee Structures and EMV Impact

All of your credit card processing fees for card-present transactions on an EMV chip terminal will stay the same, whether the card is dipped or swiped. However, businesses operating without EMV compliance face higher processing rates and additional penalties that can significantly impact their effective processing costs.

The investment in EMV technology pays dividends in fraud reduction. When you compare September 2018 to September 2015, chip-enabled merchants saw an 80 percent drop in counterfeit fraud compared to a year earlier, according to Visa.

Why Partner with a Trusted Payment Processor

For businesses seeking reliable credit card processing washington services, working with an established provider becomes crucial. Merchant Processing Solutions is dedicated to providing the latest technology as well as committed to the highest service levels. With over 30 dedicated full time employees at our corporate office in Annapolis, Maryland we are staffed for dynamic growth. As a full service payment solutions provider we provide our clients with a full suite of products including Credit, Debit, EBT, Check Conversion and Guarantee, and Gift & Loyalty Card Solutions.

The goal of any professional organization is to provide its members or clients with as much value as possible. Our approach is to partner with you and work to increase your value, quality, and reputation. We are committed to evaluating each business situation and to custom design a credit card processing approach that meets your specific requirements in the most cost effective manner possible. By recommending and installing tomorrow’s technology today, Merchant PRO ensures that your existing investment will continue to serve you well into the future.

Steps to Ensure EMV Compliance

Becoming EMV compliant doesn’t have to be overwhelming. Becoming EMV compliant is easier than ever. All you need to do is: Have EMV abilities at all card-accepting terminals. A POS system that supports EMV. And/or mobile readers that also accept chip cards.

EMV is the gold standard for safe card processing, so most merchant services providers offer a variety of affordable payment solutions. For example, Nadapayments can get you set up with a Wi-Fi-enabled EMV terminal for as little as $35 per month.

Looking Ahead: 2024 and Beyond

As we move through 2024, credit card companies in the U.S. earned a record $148.5 billion from processing fees charged to merchants. Merchants paid a record $172 billion in payment processing fees in 2023, with $170 billion going to interchange and assessment fees alone. This underscores the importance of optimizing your payment processing setup to minimize unnecessary costs.

Invest in technology that reduces your processing costs. EMV terminals, fraud prevention tools, and systems that submit enhanced transaction data all help qualify for lower rates.

The Bottom Line

While EMV compliance isn’t legally mandated, the financial risks of operating without proper chip card technology far outweigh the costs of upgrading. From monthly non-compliance fees to fraud liability exposure, businesses that delay EMV adoption face mounting expenses that can severely impact profitability.

With the additional security that EMV-chipped credit and debit cards offer your customers, as well as the protection from counterfeit fraud liability that you gain when you update your credit card processing equipment to accept these cards, attaining EMV compliance is a smart move for your businesses. If you need help determining what you need to do in order to become EMV compliant, you may benefit from consulting with your payment processor or an IT professional who can help you choose the best EMV-enabled processing equipment and software for your needs.

For small business owners, the message is clear: EMV compliance isn’t just about following industry standards—it’s about protecting your business from unnecessary costs while providing customers with the secure payment experience they expect. The technology that seemed daunting in 2015 has become essential infrastructure for any business serious about controlling processing costs and minimizing fraud exposure.