North American Bancard Blog

Posted by Nancy Bakanowicz on

emv fraud liabilityThe EMV liability shift took place on October 1, 2015, meaning any business that is not equipped to handle the new EMV chip cards is now responsible for counterfeit card transactions and data breaches, should they occur when a customer uses an EMV card in a magnetic stripe terminal. As a merchant, the prudent thing to do now is to become compliant and accept EMV cards, but if for some reason you’re still holding out, below is some information that may help persuade you that accepting EMV cards is the smart thing to do for your business and your customers:

  • Traditional magnetic stripe cards are going away. All new payment cards (credit and debit) being issued to cardholders as their current cards expire have the EMV chip, so eventually the non-chip magstripe cards will simply fade into oblivion, going the way of 8 track tapes and VHS. While these new EMV cards will continue to have a magnetic stripe on them for the foreseeable future, therefore making them “swipe-able,” many experts believe that won’t always be the case, and eventually the magstripe will disappear altogether.
  • Magstripe may be faster, but EMV is safer. By now you’ve probably heard that EMV cards are safer and more secure than magstripe cards. But why is that? On a magstripe card, all the customer data is contained on the strip on the back. It is easily read by payment terminals, and unfortunately, it’s also easily read by criminals. EMV cards, on the other hand, keep all of the customer data in the little chip embedded in the front of the card. Each time a purchase is made, a dynamic (one-time) use code is generated that works for that transaction only. While the physical card can still be stolen and used by a criminal, the card data cannot be copied, making EMV a safer choice in terms of data breaches and hacking. The EMV cards introduced in the United States still have a magstripe on the back, so they are not as secure as EMV cards in the rest of the world that do not have a magstripe and require entry of a PIN number to complete transactions.
  • Liability is a four-letter word. Currently, you can decide not to accept EMV cards, as the EMV cards being issued by U.S.-based banks have a magnetic stripe on them and will work in magstripe-only terminals. But be aware that you may be setting yourself up for some real problems down the road. The liability shift places responsibility with the party that is least prepared to prevent counterfeit smart card transactions. If you do not have an EMV terminal, that means YOU. Of course there is always the chance that no one will try to make a purchase at your business with a fake EMV card, but why take that chance? With all the time and money dealing with such a breach can cost you (and your customers!), it’s just wiser to accept EMV now, and prevent such a thing from happening. And keep in mind that, as mentioned above, magstripe cards are likely to be phased out entirely, so why not get a jump start and be ready for when that happens?

The best news is that it’s not too late to get EMV compliant! North American Bancard has several point of sale options that will get you ready to accept EMV cards – and NFC contactless payments – in no time. Accepting EMV cards is the smart, financially-responsible thing to do for you and your business. Your customer’s data will be safer and you will be better protected in case there is a breach.

Topics: EMV