Beginning in October 2015, credit cards across the United States will be required to use chip and PIN technology. These types of cards are already widely used in developed countries around the world, but until recently, they weren’t very common in the U.S. What does this new technology mean, and how can your retail store prepare for the change? Keep reading to learn more about this switch so that you can plan for the changes ahead of time.

Swipe-and-sign cards make credit card fraud easy

In the States, we’re accustomed to swiping our credit card and then signing the receipt. But, it turns out that this old-fashioned method has some hefty fraud implications. The situation peaked in 2014, with large-scale data breaches of sensitive customer credit card information at major retailers like Target and Home Depot.

Half of all credit card fraud throughout the world occurs in the U.S., but we only account for a quarter of global credit card use. The statistics speak for themselves, which is why the switch to more secure technology has become a top priority.

What are chip and PIN cards, and how are they unique?

These not-so-new cards operate off of an EMV computer microchip, where all of the data is stored. Conversely, traditional cards store data on a card’s magnetic strip. With the microchip all of the information that the merchant receives is encoded, and the encryption is different with each transaction. It’s these differences in how data is stored that makes the chip and PIN cards so much more secure. Rather than swiping the card the customer inserts their card into a terminal slot and waits for the transaction to process. Then, customers either sign or enter their PIN, depending on the issuer’s protocols.

This infographic from VISA also does an excellent job of explaining the EMV technology.

How will the change to EMV cards affect small businesses and retail stores?

Merchants are going to have to make some changes in their payment processing systems to successfully integrate the new standards in credit cards, and these changes will involve both time and money.

Upgrade your point-of-sale hardware and software

First, analyze the current hardware and software that you use to process payments. Some of your equipment may already be compatible, but other components might need an upgrade. You can speak with the company that provides the equipment, as they’ll be prepared to field any questions and help you make the necessary changes.

Your payment processing needs will vary widely based on your industry, the type of retail store you own, and other factors, but this guide from Intuit is a great resource for planning the switch to EMV technology.

Train employees about chip and PIN credit cards

Even if you already have terminals that can read a card’s microchip, don’t neglect employee training. As one Bostonian found, many employees at a variety of stores don’t understand the chip technology, and are not prepared to work with it.

Switch to chip and PIN cards before October 1, or accept liability for fraud

What will happen if your retail store doesn’t make the switch to chip and PIN cards by October 1, 2015? Simply put, you’ll be on the line for any consumer losses that occur due to fraud. Currently, that liability falls on the payment processor or issuing bank, but after October 1, that liability will shift to whichever party involved in the transaction is the “least EMV-compliant.”

Most experts agree that the change will take far longer to implement, but why wait? Start your research now, so that your retail store will be fully compliant and ready for business.