A new payment standard went into effect today, but collection agencies will be largely insulated from having to implement new technology or systems to comply with the rules.
Here is a summary of the new rules:
The rule only applies to retail transactions where a card is present. The overwhelming majority of credit and debit card transactions processed by collection agencies are done either over the telephone, through an online portal, or when the customer mails in their credit card information.
At payment processor BillingTree, for example, 99.9% of the transactions it processes on behalf of collection agencies are done through the methods listed above, said Chad Probst, vice president of sales and business development at the company.
“The EMV standard only affects people who are taking transactions through a point-of-sale terminal,” Probst said.
Where the impact on the industry will be felt most is when employees from collection agencies and debt-buying companies go shopping at retail outlets. The new standard involves a microchip implanted into credit and debit cards that will make it more difficult for thieves and scammers to steal. When the technology was rolled out in Europe a decade ago, theft and fraud by using counterfeit credit cards declined by 63%.
Unfortunately, the technology does not help prevent theft or fraud when making purchases online.