EMV Liability Shift: Don't Panic, But Start Planning

By David Gosman, CEO, pcAmerica

Chip-and-PIN technology or EMV has been in use in Europe for several years. Here’s how it works: credit and debit cards have a chip embedded in them and once the card is swiped, users have to enter a pin number to complete a transaction. It’s estimated that this technology has cut down incidents of fraud by 65 percent over the last 10 years. For the U.S., the world’s largest user of credit and debit cards, this could be an effective tool in fighting credit card theft.

Despite Americans’ love for plastic, we are well behind other areas of the world that are shifting to EMV, but that is all changing. The U.S. is expected to transition to EMV (which stands for Europay, MasterCard, Visa) over the next several years and will require billions of dollars in security upgrades. Starting in October 2015, you’ll see the payment networks liability shift that is anticipated along with the changeover to EMV.

What Is The EMV Liability Shift?

In the fall, it’s expected that the cost related to fraudulent transactions will shift from the banks to merchants if the merchants haven’t upgraded their equipment to EMV. That means businesses no longer have the credit card companies’ protections to fall back on — they’re are on the hook for  losses related to fraudulent transactions. 

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