Payday Lenders Must Prepare for New EMV Rules

Sep 25, 2015

According to a recent survey of 600 U.S. small business owners, only 32 percent of small business owners are aware of the impending Europay, MasterCard and Visa (EMV) rules. These rules require that all businesses upgrade their POS systems so that they can read chip-enabled credit cards by October 1st, 2015. Any business that does not comply with this rule will be liable for any fraud and security breaches that occur within their stores. Currently, if an in-store transaction is made with a stolen card or fraudulent card information, the issuing bank or payment processor is responsible. But on Oct. 1, liability will switch to whichever party (payment processor, issuing bank, or retailer) is the least EMV-compliant in a fraudulent transaction.

Only 35 percent of the businesses surveyed accepted point-of-sale credit card payments. Still amongst businesses that did, only 49 percent knew of the impending deadline. But even of the small businesses that were aware of the deadline, less than 30 percent said they planned to upgrade their equipment by October. Many small business owners don’t believe that the new law will really improve protection, and thus the cost of the upgrades are not justified.

If you are a small business, especially in a high risk market, you should ensure that your POS systems are compliant. Most small businesses can’t afford to be liable for stolen or fraudulent consumer credit card information. Payday loan merchants must ensure that clients are not using stolen information to make loan payments. Since the Federal Consumer Protection Bureau is investigating the integrity of many payday loan lenders, payday lenders must spend extra time scrutinizing a borrowers’ ability to repay loans on time and in full before offering loans.

Depending on the size of the security breach, not being EMV compliant could be enough to destroy a merchant’s profits or the company entirely. That’s why your business needs a professional service to manage your payday loan merchant account. EMB will give all types of merchants the opportunity to accept EMV-chipped cards by the October deadline and after.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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