Until September 30, 2015, if an in-store transaction is conducted using a counterfeit, stolen or otherwise compromised card, consumer losses from that transaction fall back on the either the payment processor or issuing bank. The merchant isn’t held liable.
After an Oct. 1, 2015, deadline, the liability for card present fraud will shift to whichever party is the least EMV-compliant in a fraudulent transaction. For example, if a card with the chip is presented at a card terminal that doesn’t accept the technology, and the card is counterfeit, the cost of the fraud will fall back on the merchant.
The major credit card issuers, American Express, Discover, Mastercard and Visa have published and delivered detailed schedules about the upcoming shift in liability. The new shift in liability is intended to help bring the entire payment industry on board with EMV by encouraging compliance to avoid liability costs.
Any merchants not EMV-ready by October 2015 could face much higher costs from fraud and in the event of a large data breach.
Harbortouch America can help with EMV compliant card readers, free with any new merchant account or Point of Sale account.