On October 2015, exactly one year from now, the deadline for implementing Chip & PIN will come. Should you miss this deadline for the “Liability Shift” and continue to use payment systems without EMV technology, you are at risk of severe consequences should fraud occur. By next year, the liability for the costs associated with credit card fraud will fall on the entity using out of date technology. According to paymentsource.com, this liability is estimated to total more than $10 billion.
So what does this mean for merchants post liability shift?
If a merchant is still using “swipe” technology and a customer is using a Chip & PIN (up-to-date) card, that merchant is liable for any fraud that may have affected this customer.
If the merchant is using Chip & PIN technology, but the customer does not have a new card yet, then the issuing bank is liable.
Yes, it’s still far enough away for a merchant to update their technology to remove liability and it seems like plenty of time at a micro-level.
In the grand scheme of things, this could get complicated for providers and merchants alike as every company that accepts payments with a terminal; retailers, service providers, consultants, salons, restaurants, hotels, ski resorts, grocery stores, personal trainers, travel agents, food trucks…etc. must also all update their technology. This could get extremely complicated as larger retailers will need to update their thousands of stores across the country and acquiring banks will be spending most of their resources on these migrations.
In many cases, most merchants will need to change providers in order to comply with these new standards. Between large, small and medium sized businesses who would you suspect to be on the waitlist when acquiring banks have reached their capacity to deploy merchant payment tech upgrades?
Early adoption of new technology is the ultimate way to avoid being stuck on the “liability shift” waitlist. Prepare yourself now. If customers all decide to start using EMV and grow aware of this issue, it’s likely they might have a negative connotation towards businesses that don’t use EMV Chip & PIN technology.
This is especially true if you are in a city that has high volumes of international visitors – foreign visitors are well aware of this. For example, EMV has been widely adopted elsewhere in the world. It’s significantly reduced credit card fraud. France claims to have seen an 80% reduction in fraud since implementation.
On a positive note, being proactive and working with a company who will help you migrate will make the 2015 deadline completely attainable and nearly hassle free. Should you have many terminals or integrations or special needs, start with a plan. A plan will help you think about everything you need to transition and will make it seamless. Consider your approach, scheduling deployment, and customer education. Often times a phased approach when making a switch is the optimal way to change.
Be proactive. Although the shift might seem like a big change, it shouldn’t impact your business negatively at all. Give us a call – we will find you the best provider that fits your unique business needs.