EMV is here: Understanding the Changes and
How They Can Impact Your Business  

Amegy Bank Business Chip Card

What is EMV?

EMV (short for ”EuroPay, MasterCard, and Visa”) is a credit card and debit card security system.  

EMV utilizes a microchip embedded in the credit card or debit card to enhance security. The chip generates unique data for each new transaction, allowing the ability to verify card authenticity. This, combined with a PIN or signature, provides greater security and reduces fraud risk.

EMV has been widely used in Europe for several years, and the U.S. Card Associations have now made EMV the standard card payment type. This switch to EMV required financial institutions, payment networks, card issuers, payment processors, and businesses to make substantial changes.  

How does this affect my business?

Some businesses have upgraded their point-of-sale equipment to newer equipment that supports EMV technology. Merchants who still do not support EMV acceptance will now bear financial liability for certain kinds of counterfeit card transactions that were previously borne by card issuers.

The new liability rules took effect on:

  • October 2015 for card-present point-of-sale (POS) transactions

  • October 2017 for automated fuel dispenser merchants or pay-at-the pump card readers

  • Please note:  If you are an Amegy merchant, you should have already been notified of any actions needed for the EMV transition. If you would like more information about EMV, visit the following Amegy website: https://www.amegybank.com/business/specialized-solutions/treasury-management/emv.

    What happened on October 1, 2015?

    The major credit card companies MasterCard, Visa, Discover and American Express, created a deadline of October 1, 2015 for EMV compliance pursuant to their “Payment Networks’ Liability Shift.” After that date, liability for fraud from certain credit card transactions shifted. Going forward, if a merchant does not change its technology to be EMV compliant, and fraud occurs, the merchant will be financially liable, and not the card company as was previously the rule. 

    Get on Top of EMV Credit and Debit Cards With Amegy Bank

    If you own or manage a business, and you still aren’t prepared to accept the newly-issued EMV credit and debit cards, contact Amegy Bank Merchant Services Department or contact our Customer Service group at 713-235-8805 for the answers you need. We want to help prepare your business for this transition, and ensure that you are EMV Chip card compliant for your sake and the sake of your customers.  

     

    Merchant Services products and services are provided directly by First Data Merchant Services Corporation, subject to its approval, and not by Amegy Bank, a division of ZB, N.A. All trademarks, service marks and trade names referenced in this material are the property of their respective owners.

     


    Family Business and Succession Planning: Interview with Nick Diaz, Senior Vice President, Amegy Bank

    Nick Diaz Headshot  Passing the family business from one generation to the next can
      be a complex process. Finding the expertise to make a smooth
      transition of business ownership requires planning and expertise
      – the kind you find at Amegy Bank.

       Nick Diaz, Senior Vice President at Amegy with a strong focus on
       succession planning for family-owned and operated businesses,
       discusses Family Business and Succession Planning.
       Recently, we sat down with Mr. Diaz for some suggestions on moving the
      family business from one generation to the next.


       When should family business succession
        planning begin?

       “As soon as possible, at least seven to 10 years out,” according to Mr. Diaz.    “I recommend an orderly transition by identifying successors from both
       non-family managers and family in the business, as well as roles for
        employed and non-employed family shareholders.”

    A plan will lay the ground work for goals and objectives that will develop a vision for personal retirement goals, financial needs of retiring owners and expectations/goals of the next generation management/ownership.”

    A well thought out succession and transition plan can also create a roadmap in case of an unexpected life event such as a death or disability in the family.”


    Should I get a lawyer to draw up the paperwork? 

    “Yes, you should obtain services from a Board Certified Estate Attorney in conjunction with your CPA.”


    What’s the best way to avoid family disputes regarding ownership of the business?

    “The best way to avoid disputes is good family business governance and communication.Developing a collection of goals and objectives for the business surrounding ownership, management and transition are keys to success. Involving current owners, family employees and non-employee shareholders in these discussions can lead to a culture of transparency and trust that can be a pillar prior to any family dispute

    Keep employee shareholders and non-employee shareholdersmembers active and well informed. Your goal is to protect the Golden Goose for your employees and non-employee owners.”


    How do I handle a go-getter relative and an under-performing relative who both want an ownership stake?

    According to Mr. Diaz, the answer is simple. “Communicate. Have a culture of accountability for any family member in the business.

    Conduct performance reviews and stay on top of family members on the job. Make sure they’re qualified for the job and can perform it well.”


    Are buyout agreements between family members practical? How is the business valuated?

    Yes, according to Diaz:


    • “Create a Shareholders Agreement that is fair and reflective of the value of the business for both the new family ownership and the legacy family owners.
    • Agree on how to transfer shares in case minority shareholders want/need to obtain liquidity from a non-liquid investment. • Have a well defined family employment policy.
    • Perhaps some family members don’t want to sell their shares because they would like their kids to work in the business. You can make a provision that those shares can be sold and the kids can still be a part of the business.
    • Agree on valuation, such as book value or stock valuation on an annual basis, a multiple of cash flow or a third party valuation firm. In the case of minority shareholders there can be a case for a discounted value for lack of majority shares.”

    How will the business owner be paid by successors? Do you need a lawyer to draw up the payment schedule or can your banker do it?

    “Your Amegy banker can help with papers prepared by your attorney. There are many ways to finance the buyout of existing shareholders ranging from traditional bank financing, to SBA 7a structures to seller notes held by former shareholders. The important item to note is that all these transactions will affect the balance sheet and debt service requirements for the business, so a conversations with you banker, Attorney and CPA are key to a successful transaction and a viable and flexible operating business post transition.”


    What are the major tax ramifications of a family business succession, and what’s the most effective way to keep tax liability low?

    “There’s a potential capital gains issue. If the owner passes away without an estate plan in place and the valuation of the enterprise is above a certain threshold, an estate/death tax issue could arise. Avoid these potential problems with a long-term plan. Start now because succession plans don’t get set up overnight.”

    Some vehicles to help support tax efficient ownership transfers include Family Limited Partnerships or Family Trusts. Mr. Diaz suggests business owners speak with their Estate Attorney or CPA on the most efficient tax structure for their individual situation.


    What common mistakes do business owners make when transferring ownership? How do I avoid these mistakes?

    “Not having a buy-sell agreement is one common mistake.”


    How do I find a good business succession planner? Are there credentials I should look for? Can I ask for references and referrals?

    “Most of this can be achieved through an Amegy Bank Wealth Strategist, Estate Planning Attorney and CPA. Our bankers want to start this discussion with businesses to help them reach their long term goals for retirement and the succession of their business. There are third party consulting firms that focus on unique and complex family business issues, but the majority of a succession plan can be met through the trusted advisors that currently surround your business.”


    Can Amegy Bank simplify the process of transferring a business to family members?

    “A majority of our clients are family businesses.

    We see a transition starting to occur of second generation members coming into the bank. Amegy is making progress educating these businesses to get started early on succession planning.

    It’s not fun to discuss things like mortality. It’s more fun to discuss playing golf three times a week. In either case, we hope to protect our family-owned business’ future, and help them grow market share.

    I’ve seen unfortunate situations occur with family businesses when they didn’t plan for the future and didn’t maintain good communications in the company. It’s sad to see.”

    So, are you thinking of passing the business to the next generation? Do the kids even want to own the business? Are they willing to work for a stake in the company? Now’s the time to start talking to family members and the business succession professionals at Amegy Bank.

    “I encourage our family businesses to give me a call at 214-754-9580, and I will be delighted to help them get started.”


     

     


    Should You Lease Or Buy Business Work Space?

    Houston-Downtown Skyline

     
      Whether your business takes place in an office, a factory, a retail outlet,
       a restaurant, or some other facility, every business owner should initially
       and periodically weigh the pros and cons of buying or leasing
      their workspace.

      Who Should Buy Workspace and Why?

      Low Rate Environment -

      As commercial rents increase and mortgage rates continue to be at 50 year
      lows, business owners should evaluate whether buying their space is a
      better option for them versus leasing it.– even startup businesses.

    For example, if the opportunity presents itself to purchase the building where your popular and long-established store conducts business, with great foot traffic on Main Street, you might want to consider purchasing that great commercial property. By doing go, you protect your business from rent increases, or worse, needing to relocate due property being sold, all while capitalizing on today’s low rate environment.

    Added Value -

    When you buy your business facilities, you add immediate value to your company. The businesses value will now include not only its product, client base or customer list, but the building, office space, parking lot, warehouse – the place where its business activity takes place.

    If your objective is to add value to the business, purchasing real estate is one way to add value quickly.

    Fixed costs -

    Knowing your monthly cost of facilities (maintenance, utilities, commercial mortgage, cleaning crew) enables you to more accurately project expenses and simplify your business planning.

    Another advantage of owning your company’s business space?

    Tax write-offs -

    You can deduct mortgage interest on the company tax forms the year they’re incurred. Same with local and state tax assessments – another nice deduction for businesses that own their space.

    Before you buy, talk to your financial adviser to determine just how much tax savings you’ll enjoy when you purchase your business’ space.

    Buy it and do it your way -

    When you buy the property, you can make it your own, comfortable that you won’t lose your investment in property upgrades. Invest in yourself when you own your space.

    When You Should Lease and Not Buy

    Not every business should buy its workspace. For example, start-up businesses with constricted budgets should probably use whatever cash is available to market and grow the business.

    Stability of business revenue is an important consideration for not only small business owner but also the lender when attempting to finance the purchase.

    Buying company space during a time when cash flow is unstable or company cash is tied up would not be in a business owner’s best interest. You’re probably better off putting excess cash to other uses like purchasing equipment or hiring more staff to boost production.

    Also, having a non-established location or an unideal location would be another reason to lease versus buy business space. Sometimes finding the right location for your business takes time. Markets change, businesses move locations and keeping your business flexible to make these moves is ideal and a smart move for certain business owners.


    Your bank can help!

    It’s a smart business decision to discuss commercial real estate options with your banker. These financial business professionals could guide you down the best path for taking your business to the next level. Before you make a decision to buy or lease your business space, consult the commercial real estate professionals at Amegy Bank to chart a course for continued business success.


     


    Building a Legacy of Community Pride, One Home at a Time



    Sharone Mayberry of Mayberry Homes didn’t start out as a builder. He   had a job as a successful computer technologist. One afternoon, Sharone decided to visit his old neighborhood. What he saw changed everything. The neighborhood wasn’t what it used to be. Sharone had friends who still lived there and he was determined to not just let it wither away.

     

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