Shaken by Target’s massive data breach, the US hurries to catch up with the world in credit card fraud prevention. Introduction of Chip & PIN technology means American businesses need to upgrade card readers by October 2015.It comes as a curious anomaly that the US, which is the number one business and enterprise beacon for the rest of the world, should be so behind the rest of the world when it comes to Chip & PIN payment solutions as well as the uptake of EMV technology powering this change. Chip and PIN cards and card readers have been the standard in Europe for well over a decade already.
Watershed moment for Chip & PIN in the US
There is one particular event that can be seen a watershed moment for the acceptance of Chip & PIN solutions in the US; and that is the security breach at Target, when the credit card information of up to 40 million customers was potentially compromised.
The furore surrounding the data breach and fallout together with the subsequent Senate Judiciary Committee hearings on the introduction of EMV technology and Chip and PIN cards has acted as a catalyst in bringing to greater public and media attention the changes that will be required of businesses that take credit and debit cards. This was underscored at the hearings during which the shocking fact was revealed that half the world’s credit card fraud takes place in the US.
What is EMV?
EMV is an abbreviation of Europay, MasterCard and Visa and the company was set up in 1999 to implement a set of standards in order to ensure global interoperability of payment systems and chip-based cards. The company has since expanded and now has six members: American Express, JCB, Discover, MasterCard, UnionPay and Visa.
Will your business be ready for October 2015?
October 2015 is a date that every business owner in the US should be aware of, since MasterCard and Visa have set that as the deadline for when merchants have to be ready to accept EMV-enabled card payments, such as Chip and PIN cards. The desire to reduce fraud is the driving factor behind this change, and this has been crystallized into an industry buzzword: ‘liability shift’.
Liability shift and your business
Liability shift means that after October 2015 if you take a payment using the old stripe and signature method using a card that is EMV-enabled and the transaction turns out to be fraudulent, then you may be liable for the costs. This is surely reason enough to ensure that your business is ready for the October 2015 deadline.
Are there any Chip and PIN cards already?
As the migration to accept EMV-enabled cards has already started, a few financial institutions are offering chip-enabled cards, such as Bank of America, but to date they are by no means universally available in the US. It is likely, however, that this will change and gain momentum as the deadline approaches.