Banks have no obligation, however, to reimburse consumers who report the fraud more than 60 days after a card statement has been issued.
Advertisement
But just 29 percent of business owners say they plan to upgrade their point-of-sale credit card terminals to accept EMV chip cards before the deadline, and 21 percent said they never plan to upgrade.
The majority of payment terminals at US merchants will not be ready to accept cards with embedded microchips aimed at reducing fraud by October 1, missing a deadline set by banks and credit card companies, according to the National Retail Federation. Developed by Europay, Mastercard and Visa, the system requires the cards to be outfitted with a tiny computer chip that transmits a unique code with each transaction. The chips provide additional information beyond what is provided by the magnetic strips that allows a merchant to authorize a transaction: a cryptogram that changes each time the card is used.
Randy Vanderhoof, executive director at the Smart Card Alliance, explains: “Everything a fraudster would need to make a duplicate was available by copying the stripe itself or stealing data from the merchant data system”.
Banks and lending companies are in the process of converting all credit, debit and eventually gift cards with an encoded chip. “The thieves will figure out that the back door is unlocked”.
“The global EMV payment standard is a call to action businesses can’t afford to ignore, and channel partners should embrace as a strategic opportunity to engage with customers and prospects to more easily become EMV-compliant”, said Ingram Micro’s Yelton.
– The way you use your credit card is changing. For several seconds, slightly longer than most people may be used to, cards are inserted and left in the cashier’s payment terminal, which uses the chip to determine whether the card is legitimate.
A few banking executives have cynically suggested that consumers might have difficulty using their credit cards if they need to remember a four-digit PIN.
This will help channel partners take the lead in addressing one of the bigger business risks and challenges facing retailers and businesses of all types that accept credit cards today. Food retailers also recognize that the actual checkout lane is where the customer will learn to use an EMV card.
Kristen Bohlen already has a new chip card but she didn’t know about the mandate for the more secure cards.
One area in which the food retail industry agrees with the card networks is that October 1 is not the end but a marker in a long transition for our economy.
There is a lot of motivation for businesses and credit card companies to switch over to this technology.
While retailers scramble to have the chip reachers, banks and other financial institutions are working to send out more chip cards. Cancel your card if you find fraudulent charges and consider changing your PIN. Once those stripes are phased out as they have been in other countries, it will make things considerably more hard for credit card thieves.
Advertisement
A colossal shift in credit card technology aimed at curbing fraud was supposed to wrap up by Thursday, but the transition is still playing out in slow motion. The machine will prompt you to retry the purchase by using the EMV-card reader.
