by Scott Koski

EMV Chip Credit Cards and Retailers – What you Need to Know


The shift is on – after way too long of a delay, the U.S. will join the rest of the developed world and make the transition to EMV (Europay, MasterCard, Visa) microchip containing credit cards. Depending on whom you choose to do your banking with, you may have already received your updated credit cards that contain these chips. The switch is being made predominantly for security purposes as the outdated magnetic stripe cards first introduced in the 1970’s are easily duplicated and stolen. The new cards will change the way your point of sale transactions will occur, and the level of security that goes along with them.   From a liability standpoint not much will change for the consumer, but in reference to business owners and retailers, here are some of the things that you need to know:

  • Business owners must upgrade your terminals.
    • Starting October 1st 2015, if a retailer is presented a chip card and has not upgraded to a chip terminal, they assume all responsibility for purchases for the following cards:
      • American Express, Discover, MasterCard
        • Lost
        • Stolen
        • Visa
        • Counterfeit Cards Only
      • Previously, the issuers of the card (banks) have been liable to pay the merchant for all of the above listed transactions; under the new shift the merchant will no longer be reimbursed.
  • Pay at the pump retailers have more time.
    • There is a two year extension for gas retailers due to the increased cost of the pump terminals.

In reality the transition to these cards was necessary. With magnetic cards, hackers have been able to access systems and collect card information for months at a time without being noticed; then sell the card information to be duplicated and used. With new chip technology the CVV (the three digit number on the back of your card) is actually an 18 digit number that changes every time you make a transaction. By the time a hacker has received and duplicated your card, if you have used it at a different retailer, the stolen information is useless, making your information much more secure.

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