The deadline for merchants to switch over to payment systems that accept chip credit cards has come and gone, yet the pool of business owners who have installed the new credit card readers remains small.
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The EMV liability shift means that any businesses that have not upgraded to EMV payment terminals after today will be liable for fraud that occurs on an EMV-ready credit card. Now that October is here, these new EMV or “chip” cards are being reissued in droves to cardholders across the U.S. “It is different from people who are just used to swiping and putting it back in their wallet”, Schulz said. Even with the new technology, it is still extremely important to review your credit and debit card statements.
Chip-enabled cards are more secure than those with just a magnetic stripe because they generate a unique code for each transaction, making them harder to counterfeit. Apart from this, they are not safer, as data would still be vulnerable. This process allows for the chip to encrypt the data to secure the transaction. That means that if a thief acquired that code, it couldn’t be used to make another purchase. “That would make the chip and PIN the most secure option”. Unfortunately, online or Card Not Present (CNP) transactions won’t be able to take advantage of the added fraud protection offered by a chip.
But the magnetic strip won’t be disappearing. In other words, businesses of all sizes from retail chain outlets in the mall to Mom-and-Pop stores downtown can be on the hook for most fraudulent activities involving major credit cards, including MasterCard, Visa, Discover, and American Express.
I’ve recently started using chip transactions, and I can confirm that the credit check-out process now takes slightly longer than it did a few weeks ago. In the event you don’t have a chip card but, your conventional magazine stripe card will nonetheless work on all new terminals. Quick example: One of my absolute favorite developments of the past few years has been the way credit cards and retailers have done away with the need to sign a receipt for small purchases .
What if I haven’t acquired my card but? Why Is Everyone Talking About This Now?
The liability shift is just that – the accountability for fraudulent or counterfeit transactions has passed to the merchant.
Here’s the problem, say Portland-area retailers: They paid to upgrade their systems by the October 1 deadline, but others involved in the changeover didn’t move with the same sense of urgency. When asked specifically whether Visa would commit to lowering swipe fees if fraud declines, Ericksen dodged the question and instead claimed that the fees are “competitive” and are set to attract business from both issuing banks and merchants. This is known as the liability switch.
Most people have only had one experience with technology: It gets more and more efficient and gets faster and faster.
“Many owners have done their homework, and the card payment industry has done a good job at educating their customers”, said Wade.
EMV is a series of specifications defining a more secure method of card payment developed jointly by Europay, MasterCard and Visa in the mid-1990s. “By the top of the 12 months, we anticipate that 70 % of playing cards can have a chip on them”, Johnson mentioned.
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“A fraudulent transaction 60 days ago that happened at the point-of-sale within a merchant’s business – [the] bank would cover that fraud”, said Douglas Mearkle, senior VP and head of US Merchant Services at TD Bank. The chances are that your new credit or debit card is already on its way to you.
