What is Credit Card Chip Technology and the EMV Liability Shift?

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This October, merchants will be required to make the change to the new EMV (Europay, Mastercard, and Visa) credit card chip technology. With 1.24 billion payment cards and 15.4 million POS terminals currently in use, there is certainly a need for heightened security of credit card and banking information. This fall, the EMV liability shift will deliver just that.

This technology will be in your wallet with new chipped debit and credit cards, as well as in stores’ card readers at their checkout terminals. The chipped cards will protect in-store payments by generating a one-time code needed for each transaction to be approved. This EMV chip technology makes it virtually impossible to counterfeit cards or steal credit card information upon checkout because the code connected to the consumer’s card changes with each transaction.

While this technology has been available for some time, the EMV liability shift date is what will cause the greatest change on October 1, 2015. At this time, if a customer uses a chipped card to pay for a transaction at a store, and their information is stolen, either the merchant or the financial institution (whoever has not adopted the EMV technology) will be liable. Up until now, if a customer uses a magnetic striped card to pay for their transaction and their information is stolen, the merchant is not liable for the damage, but rather the banking or financial institution.

The EMV liability shift date is October 1, 2015. However, the liability shift for fuel dispensers and ATM transactions is not effective until October 2017. The EMV liability shift is applicable to all businesses–large and small–regardless of size.

When both parties adopt the new credit card chip technology, in-store fraud is virtually eliminated and both customers and merchants can enjoy peace of mind knowing their financial information is protected.


Read more about the EMV liability shift:

How Does the EMV Liability Shift Effect my Business?

What do I Need to do to Prepare my Business for the EMV Liability Shift Date?

Ben Sutton

Ben Sutton

Ben Sutton is the founder of Mazuma USA, an accounting firm providing tax, bookkeeping and payroll services to small businesses. Since founding Mazuma, Ben has established himself as an expert in the small business world. He’s still driven by that same desire to provide accounting help to all small businesses – from photographers, bloggers and creatives to lawyers, doctors, and dentists, everyone needs affordable accounting help. Ben is a Certified Public Accountant, and a member of the American Institute of Certified Public Accountants. But Ben considers his greatest achievement and credential to be his happy wife and four children.

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