The EMV Liability Shift: Ok Now What?

The question Now What? on a cork notice board

After 4 years within the making, the nation’s EMV (Europay, MasterCard, and Visa) liability shift has finally happen. Beginning today &#8211 on October first, 2015 &#8211 retailers without having-of-date charge card readers is now able to held responsible for certain kinds of fraud, particularly the kinds of fraud which might have been prevented using a fancy new EMV charge card terminal able to processing chipped credit and an atm card. It&#8217s a sobering prospect, but if you’re one of individuals who&#8217s still behind the occasions, don&#8217t panic yet: we at Merchant Maverick are here to assist.

Wait, what&#8217s the large deal again?

We&#8217ve written this handy guide about them. If you would like something a little more technical, I would suggest looking at this document in the EMV Migration Forum.

Here&#8217s the tldr version: in case your business processes a dishonest card when you might have (theoretically) prevented the problem having a nick card readers, it&#8217s your decision to feet the balance. Should you designed a $500 purchase using outdated equipment and then discover the card would be a fake, you&#8217re out $500, however if you simply&#8217re while using correct equipment and process a poor card, the issuer needs to cover the fraudulent costs. Essentially, the liability lands from case to case who’s &#8220least outfitted&#8221 to handle change. When the onus was around the issuer because of not delivering out chipped cards, they will be to blame. Should you&#8217re the main one using the out-of-date tech, it&#8217s for you.

But many people don&#8217t have chipped cards anyway. How come it matter?

Which may be true now, however the occasions, they’re a-changin&#8217, and everyone&#8217s altering together. It&#8217s believed that through the finish of 2015, 25% of an atm card and 70% of charge cards issued is going to be chipped, and individuals figures are simply likely to keep getting bigger.

I&#8217m not convinced yet. Just what shall we be held responsible for?

Even though it might vary a little based upon the issuer, the merchant could be held accountable in three situations:

  • A counterfeit nick card (both nick and signature or nick and PIN) can be used having a non-EMV terminal
  • A stolen or lost nick and PIN card can be used having a non-EMV terminal
  • A stolen or lost nick and PIN card can be used having a nick and signature EMV terminal

The 3 situations could be prevented by upgrading to a different EMV card readers (possibly except for the final scenario&#8211more about this in a moment).

You may luck out though in some instances, the issuer continues to be accountable for the fraud despite any outdated technology from you. Generally this is due to the truth that not every cards are chipped yet, which really isn&#8217t your fault.

Fundamental essentials kinds of fraud you aren’t accountable for, even though you don&#8217t come with an EMV terminal:

  • A counterfeit magnetic stripe (non-chipped) card
  • A stolen or lost magnetic stripe (non-chipped) card
  • A stolen or lost nick and signature card

Last factor: if, in certain nightmarish scenario, you ultimately have an EMV terminal, however the nick readers fails and you’ve got to select from swiping cards, you won’t be responsible for any fraud. There’s a couple of caveats: you have to identify it as being a &#8220fallback transaction,&#8221 and also you canrrrt do it an excessive amount of (issuers might start to suspect foul play). Again, equipment failure isn’t your fault. The entire idea would be to make fraud harder, to not make merchant&#8217s lives harder.

Hold on: so why do you retain speaking about nick and signature cards? 

Nick and signature cards are used by issuers to help make the transition simpler. It&#8217s less confusing for everyone to transition from magstripe and signature to some nick and signature card. You never know what sort of mass-chaos we&#8217d be speaking about when we went directly from magstripe and signature to nick and PIN?

Don&#8217t worry&#8211if your EMV machine can&#8217t do PINs, like many readers that connect with an apple iphone (Square&#8217s, for instance), you may still process nick and PIN cards the device will undoubtedly default to some signature rather. It isn&#8217t necessary to obtain a nick and PIN readers yet since most customers won&#8217t get one for some time. Just bear in mind the issuer&#8217s finish goal is nick and PIN cards, and you may need to upgrade again inside a couple of years.

Here&#8217s the offer: you&#8217re going to need to do with the money new terminals eventually you may as well get it done before you decide to generate losses on the fraudulent purchase.

Okay, fine &#8211 I&#8217m convinced! Ok now what will i do?

It&#8217s really quite simple. Any provider of magstripe-only terminals ought to be selling some shiny new EMV terminals. Your work would be to go forth and purchase some! Take a look at our FAQ on investing in a new terminal and our favorite merchant service providers to make certain you&#8217re obtaining the best prices.

Any queries? Concerns? Leave them within the comments!

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