Understanding Credit Card Fraud Liability for Your Business in the Age of EMV

Payment Processing Security

In the world of credit card processing, we’re entering the Age of EMV.

What is EMV? And how does it affect your business?

EMV, an acronym standing for Europay, MasterCard, and Visa, the original developers of the technology, is a standard of payment that stores card information in a smart chip rather than a magnetic strip, making it a more secure form of payment.

Not surprisingly, the growing popularity of EMV payment standards directly correlates with a reduction in fraudulent credit card charges and counterfeit cases. However, because EMV has migrated more slowly to the U.S., many fraudsters are targeting U.S. businesses before EMV becomes a more widespread and integrated form of payment. That means if you’re not operating with EMV technologies for your POS systems, your business is vulnerable to credit card fraud.

Though 45% of the world’s payment cards are EMV, that’s 1.62 billion cards (excluding the U.S.), EMV has developed more slowly as a standard of payment in the U.S. But that’s changing, and fast. As of October 2015 many payment networks, such as Visa and MasterCard, American Express, and Discover, have implemented “liability shifts” that could impact how fraudulent credit card cases are resolved.

Previously, fraudulent card transactions were the responsibility of the card issuers; however, after October 2015, in some cases, responsibility shifts to merchants if they do not have EMV chip-enabled POS devices or applications.

Most EMV cards are backward compatible, still giving merchants the option of processing customer EMV cards using a magnetic strip. However, given the recent shifts in liability from major payment networks, fraudulent charges from magnetic strip cards containing data copied from an EMV card could become the responsibility of your business.

As EMV cardholders and technology continue to grow in the U.S., it’s important that your business keep up with trends and developments in credit card processing. Doing so helps minimize complications with credit card transactions and keeps your business vital and profitable in an increasingly “cash-less” world. Avoiding the responsibility for fraudulent credit card transactions by installing EMV POS systems for your business is key to making this happen.

Installing EMV compatible POS systems and applications for your credit card transactions is a major way you can protect your business against fraudulent charges and keep your business running smoothly. Not familiarizing yourself with changes in credit card processing could over-complicate your business and cost you big in the long-run.

If your business is still operating solely on magnetic strip readers, it’s time to switch your POS systems! Visit Swypit.com to learn more about EMV and updating your POS terminals to be compatible with EMV standards.