Smart-chip cards require a specific card reader, but according to a July survey conducted by Wells Fargo and Gallup, almost half of all small business owners in the us were unaware of the pending liability shift. “The high profile data breaches that resulted in millions of Americans having their card accounts compromised weren’t caused by petty thieves swiping cards out of wallets – they were caused by criminals exploiting cracks in the retailers’ security systems”.
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“The migration of USA issuers to chip cards will ultimately help mitigate counterfeit fraud”, Freeman says.
The U.S.is finally migrating to EMV (short for Europay, MasterCard and Visa) chip technology.
“The findings of this study indicate that EMV could pose serious challenges for credit card companies and retailers as the busy holiday season approaches”, said Jared Isaacman, founder and CEO of Harbortouch.
At the same time, retailers have been installing new point-of-sale terminals and the associated technology. While it’s in there, the chip and reader communicate to create the one-time transaction code, and then you’ll have to step in to complete the transaction.
EMV technology adds more support to traditional cards which, for several years, have exclusively relied on magnetic strips for providing protection. Gasoline stations that accept credit cards have until 2017 to make the change.
The change is prompted by the growing use of computer chip-protected credit cards, and an October 1 deadline that makes retailers who can’t process chip-protected card transactions liable for fraudulent charges.
Saying that chip and PIN cards were the preferred choice of card payment globally, De Souza noted it was critical that Barbadians were brought up to speed with the technology. “Counterfeit fraud is the largest type of fraud impacting US card payments, so switching to chip cards will certainly help the situation”. If the merchant does not have a smart card reader, you can make the purchase with a magnetic stripe like before, as the card is also equipped with a magnetic stripe. “Varying rates of adoption and opinions on the benefits of chip cards means more can be done by all parties to ensure a smooth transition on October 1st and beyond”.
Because the US was late to the game, fraudsters have targeted residents’ magnetic swipe cards and financial providers are working to quickly catch up to chip cards, Topolski said.
If you travel overseas regularly, you’ve probably already seen chip card technology in action. If you have received a chip card from your bank or financial institution, you’ll want to make sure you activate that card and start using it as well as destroy your old card. Or call the phone number listed on your card, not provided in emails. Therefore, if the business chooses not to invest in chip technology, it could become legally and financially responsible for counterfeit fraud conducted in their stores. The process of paying for things online will remain the same and thus you’ll face the same dangers as before.
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The impending liability shift is an opportunity for merchants to lead the way in secure payments and ensure they keep current customers’ data safe.
