Starting Oct. 1, a major shift in liability takes effect. On that date, businesses without EMV-card-reading technology could be responsible for counterfeit credit/debit purchases and in some cases lost or stolen cards. Today, if a retailer accepts a counterfeit card and does everything else correctly, you don’t hold any liability for that chargeback. The bank that issued the card is responsible for the loss. As of Thursday, Oct. 1, the loss may become your responsibility.
With EMV, or Europay, MasterCard and Visa chip technology, instead of swiping a card, a consumer inserts the chip card and leaves it in the reader throughout the authorization process or simply taps the card in the case of a contactless transaction. The embedded microchip, unlike a magnetic stripe, cannot be replicated, making it more difficult for hackers to use stolen card numbers to produce fraudulent credit cards. To read more on the process of changing to the EMV payment system, click here.
Upgrading your terminals by Oct. 1 is not a requirement or law. The deadline relates to which party is liable for fraud and was put in place by the major credit card companies to convince retailers to update their in-store terminals to accept the more secure chip cards. New cards being issued to cardholders retain the old magnetic stripe for merchants who haven’t made the switch.
The most secure card processing system available at this time involves the embedded chip and an accompanying personal identification number, or PIN. A chip-and-pin system leaves your business with the least amount of liability, and even further combats fraud. Consider upgrading your terminals to handle chip and pin as well as chip and signature transactions.
If you haven’t begun the upgrade process, contact your credit card-processing company immediately as the change-over process can take up to four months.
While you explore your options about upgrading your terminals, be sure to keep CHECKredi in mind. CHECKredi is the only Alabama-Retail-endorsed merchant services provider. The Huntsville-based company offers great pricing, excellent customer service and requires no contract. Get a free month-to-month comparison today!
A more in-depth article complete with a graphic explaining how the liability shift for counterfeit cards works as well as one on lost/stolen cards is available here.