Despite the EMV liability shift coming into effect October 1, 2015, there are still plenty of merchants and business owners who haven't yet made the switch. Some simply haven't been able to incorporate the new technology into existing payment processing systems, while others don't seem to understand the impact the EMV liability switch could potentially have on their business operations.
In essence, the liability for some types of fraudulent card transactions could now be passed on to the merchant, instead of being passed on to the card issuer. As a result, if your business or your employees process a payment at your non EMV-capable point-of-sale (POS) payment processing device and it turns out to be a fraudulent transaction, you could be liable for any chargeback costs incurred.
In order to reduce your business’ risk of liability, it's crucial that all of your employees understand the gravity of the EMV liability switch and how it could affect your business and your customers.
Your employees need to understand the importance of reducing your business' EMV liability risk when accepting card payments. Even if you explain the switch to them verbally, it's also a good idea to download or print out copies of the EMV Migration Forum "Understanding the 2015 U.S. Fraud Liability Shifts", which is available here: http://www.emv-connection.com/wp-content/uploads/2017/07/EMV-Fraud-Liability-Shift-WP-FINAL-July-2017.pdf.
Having the document handy could provide a helpful reference point, especially if you're still using a payment terminal that is not enabled for use with a Chip-and-PIN or Chip-and-Signature card.
If your business is still using an older payment processing device, there are some ways you can help reduce the risk of liability to your business. Ask your employees to take the time to check that the signature on the back of the card matches the signature on the receipt.
If your business uses a PIN Pad device, ask employees to check with every customer whether they would prefer to make the card payment as a debit transaction instead of a credit transaction. Aside from reducing your fees, a PIN-verified payment helps to reduce the risk of fraudulent transactions.
You can learn more about making the transition for EMV migration for your business here: http://www.payanywhere.com/blog/emv-migration-raises-questions
Once you've made the switch to an EMV-capable payment device, you'll need to ensure your employees understand the differences in how the machine may affect payment processing times.
Even if you have already implemented EMV-capable credit card readers in your business, it will take time for your customers to become accustomed to using their EMV cards.
Customers will need to learn to insert their card into the terminal to process a transaction. You should instruct your employees to explain to customers that the EMV transaction can often take several seconds longer to verify than a swipe transaction, as the terminal and microprocessor chip within the card need to communicate throughout the transaction.
When the payment is complete, ask your employees to remind all customers to remove their card from the terminal. Many customers may simply forget to remove the card, especially if they're already accustomed to swiping cards to make payments.
The EMV liability switch may have increased the risk of counterfeit fraud liability for many small business owners, but there are ways to reduce that risk. The key is to ensure all employees understand their role in helping to protect your business against fraudulent transactions, and to work on upgrading your payment processing devices and terminals to be EMV-capable as quickly as possible.