ATTENTION BUSINESSES: WHY SHOULD EDUCATE YOURSELF ON EMV? The card associations have not mandated EMV acceptance. They are, though, enacting changes that incent merchants to upgrade to accept EMV cards. Two important rule shifts are coming. First, October 1, 2015, merchants become financially responsible for card present, magnetic stripe fraud if they have not updated to EMV. October 2015, the cost of magnetic stripe fraud is no longer the issuing bank’s responsibility. Two examples: 1. A cardholder presents a card with a chip and magnetic stripe to a merchant that has not upgraded to EMV. Because the merchant must process the transaction using the magnetic stripe, the merchant is liable for any fraud. 2. A cardholder presents a similar card to a merchant that did upgrade to EMV. The merchant is not liable for fraud because they process the transaction using the chip. Hackers and fraudsters will aggressively seek to exploit merchants without EMV. Issuing banks will charge-back fraud from mag stripe transactions. Increasing charge backs from mag strip fraud will cost merchants thousands of dollars, no longer just a cost of doing business. Second, magnetic stripe cards as we know them will cease to exist for payment processing. The card issuers are in the process now of migrating all US issued cards to chips. So, in the future, US merchants with just magnetic stripe readers will be unable to process transactions. A merchant’s short-term EMV investment incentive is to prevent and stop greater charge back losses. The future incentive for EMV is simply to accept American Express, Discover, MasterCard and Visa chip cards as payment. Contact IMA for more information at 402-758-0010.
Posted on: Tue, 11 Mar 2014 15:18:46 +0000