While EMV alone can’t prevent a data breach, it is important for everyone in the payment stream—issuers, processors, merchants—to adopt EMV as an important method in stemming the impacts of data breaches and the resulting use of counterfeit cards. Merchants are not required to upgrade to EMV, however, it’s important to understand the financial impact that could occur if EMV is not supported in your business.
In an effort to drive issuers and merchants to adopt EMV technology, an incentive called the “Liability Shift” was established. It took effect in October 2015 and, shifts the responsibility for some fraudulent transactions to the “least-secure” party (issuer or merchant) who is not EMV ready. A merchant may be liable for counterfeit card fraud that occurs on any chip card used on a magnetic swipe terminal. An issuer is liable for most fraud that occurs on any magnetic stripe card used on a chip card-enabled terminal. It is estimated that 70% of credit cards in consumers’ wallets will contain EMV chip cards by the end of 2015.
Learn more about the Liability Shift by visiting the EMV Connection website.