“The chip cards are coming! The chip cards are coming! By land and by sea. Organize the merchant militia!”

If you haven’t already heard, the instatement of EMV cards is imminent in the US. Suddenly all of those sales pitches from agents over the past few years (“You really need this future-proof terminal” “EMV cards are the future, you might as well upgrade now”) are beginning to sound less like pushy gimmicks and more like ignored prophecy, with your soon-to-be useless credit card machine hanging around your neck like the mariner’s albatross.

It’s not all gloom and doom, though. Yeah, a lot of merchants are going to need to upgrade soon (maybe a good time to buy stock…), but the real headache is going to be for the merchant service providers who need to make sure all of their clients are using the right equipment and convincing the clients that an upgrade is necessary. There’s a little bit of The Boy Who Cried Wolf in this scenario: We’re constantly bombarded with the upsell (Would you like fries with that?), so we’re wary of this sort of thing, especially from payment processing companies, who most of us regard as on par with used car or insurance sales reps (no offense to these professions).

But I’m here to give it to you straight. Yes, you really do need a new fancy credit card machine soon. It’s not the end of the world if you don’t start running with the rest of the lemmings right away, but you will be at greater risk for fraud liability if you process a counterfeit chip card come October 2015. Also, at some point your processing company can and will force you to upgrade, so check out some of our favorite providers so you don’t get screwed when you buy a new machine.

What is an EMV Chip Card and Why Do I Care?

For starters, EMV stands for “Europay, asterCard and isa, ” which set out to create world-wide standardized protocols for so-called “integrated circuit” cards and the hardware necessary to accept these cards. This was no easy task, but by 2005 – almost a darn decade ago – chip cards became status quo in the EU. By 2012, Canada also joined in on the EMV party.

These cards are manufactured with a small integrated circuit (or “chip”) in the card. Payment data is read from this chip instead of from the magnetic stripe. This protects against fraud in two ways. First, the chip itself is more difficult and expensive to counterfeit. Second, the way the data is transmitted varies each time it is read, making it dynamic instead of static. Thus, while info from a magnetic stripe can be “skimmed” easily, chip information is much more complicated to glean.