A new type of technology is transforming the way consumers pay for goods and services, and orthodontic practices will have to adapt just like any other business.
Later this year, the transition to EMV chip credit card technology will sweep through the United States. The change means businesses will have to accept a new type of credit card that processes payments using a microprocessor chip embedded in the card. The microprocessor stores and protects cardholder data. Each time the card is used, the chip creates a unique transaction code that cannot be used again.
By October, businesses that do not switch over to accepting EMV card payments will assume liability for fraudulent transactions. That includes orthodontic practices.
Practices should make some time to prepare for the switch.
“With the EMV transition, it’s a good time for orthodontists to evaluate their current processing program and learn about the type of equipment necessary to accept chip credit cards and other ‘contactless’ payments,” says Tracy Schmidt, vice president and general manager of NCMIC Finance Corporation.
Many businesses have already made the switch to EMV. About one-third of NCMIC’s merchant customer base is now using this technology.
These new cards are issued by credit card companies, and they are considered more secure than traditional magnetic swipe cards. If an EMV card is stolen, the one-time transaction code can’t be used to create a counterfeit card and commit fraud.
Because the overall transition to EMV chip technology is anticipated to be gradual, credit card companies are issuing cards that have both chips and magnetic strips.
EMV cards are read in a slightly different way than cards with a magnetic stripe. Depending on the card, patients will eventually use one of two methods to pay:
- Inserting: Similar to using an ATM, customers will insert their cards into the machine until the transaction is completed.
- Tapping or Waving: Near Field Communication (NFC) card reading will allow patients to simply tap or wave the card near the reader.
“Orthodontists may want to consider a terminal that can process both EMV insert and tap-and-go payments,” Schmidt says.
In addition to being prepared for this EMV deadline, orthodontists should be getting ready to accept new electronic wallets like Apple Pay, Google Wallet, and other “contactless” digital payments.
Even though businesses will be liable for fraudulent transactions come October 2015, the switch to EMV technology isn’t required, but will likely be the best bet for practices to protect themselves.
“The migration to chip is not a mandate, so medical practices, including orthodontic offices, need to decide if going chip is right for their business,” says Randy Vanderhoof, director of the EMV Migration Forum. “To go chip, practices will need to get a chip-enabled terminal from their payment services provider.”
But that’s not the only benefit of switching over.
Over the past year, massive credit card security breaches at stores like Target and Home Depot and at health insurance companies like Premera Blue Cross have signaled to consumers the importance of taking action to protect their financial transactions and data.
In those cases, hackers who accessed transactions at places like Target and Home Depot were able to gather bank account numbers, social security numbers, email addresses, mailing addresses, names, and phone numbers to recreate the identity of actual cardholders.
“Some businesses may see a change in customer loyalty,” says Vanderhoof. “More and more, consumers are learning about chip technology and the benefits it offers; not accepting chip payments could impact whether a customer visits your office or someone else’s.”
Orthodontists should contact their credit card processors to determine what they need to do to adapt to the changes. OP
A.J. Zak is a freelance writer for Orthodontic Products. She can be reached at [email protected].