In most cases the fraud liability shift will not impact the majority of AmigoPOS users due to the relatively low average transaction amount. Fine dining restaurants, night clubs that offer bottle service and other high end venues should adopt EMV capable merchant account on or before the fraud liability shift takes effect on October 1, 2015 to reduce the chargeback risk associated with fraudulent transactions.
In essence, the fraud liability shift states that if a customer pays with a chip card and your device is not capable of reading the chip and the card is swiped or manually keyed, the business will be held liable for a chargebacks. Fast food restaurants, pizzerias and bars have the lowest chargeback rate in the industry so that the benefits of early EMV adoption may not outweigh the costs associated with obtaining new devices. However, as chip cards become more prevalent, consumers will expect businesses to have payment terminals that are capable of reading the chip card.
The following description of the fraud liability shift is paraphrased from the Vantiv documentation:
EMV Chip Card Technology Has Arrived. Is your business ready?
Chip cards, also known as “smart cards,” are credit or debit cards that have sensitive cardholder information embedded in a data chip in the card, as opposed to traditional credit cards where the data is only stored in the magnetic stripe on the back of the card. While the two types of cards may look the same, the way that the data is accessed to process a payment transaction is very different. Traditional credit cards are swiped through a magnetic stripe reader, or credit card terminal in order to perform a transaction. Chip cards can be swiped too, but have extra security advantages when processed via EMV chip readers instead.
EMV chip cards help prevent in-store fraud and are nearly impossible to counterfeit. EMV technology increases cardholder security and chip card technology is becoming the global standard for both credit and debit card payments.
The Liability Shift
To increase the adoption of chip technology, Visa, MasterCard, Discover and American Express will implement a liability shift for domestic and cross-border counterfeit transactions effective October 1, 2015.
Once the shift goes into effect, merchants who have not made the investment in chip-enabled acceptance technology may be held financially liable for in-store fraud that could have been prevented with the use of a chip-enabled acceptance device. Mercury Payments makes it simple for you to meet the new EMV standards using your POS system.
Key Benefits
Reduce risk of counterfeit, lost or stolen card fraud
Reduce card skimming at the point of sale
Accept foreign cards that are already EMV enabled
Modernize your POS by supporting EMV and contactless payment technologies
Next Steps
If you want to avoid the fraud liability after October 2015, you’ll most likely need to implement an EMV capable card reader that can interface properly with your POS system and its software. If your POS system is incompatible with EMV technology, you may need to upgrade your software and hardware. Because there are many considerations, adding EMV acceptance is best done in partnership with your POS provider.