Retail Observer

RETAILOBSERVER.COM MAY 2015 60 W hat is EMV? EMV is a joint effort between Europay, MasterCard and VISA to improve payment safety through better credit card security and higher practice standards. Countries that have implemented EMV have seen card fraud plummet- France boasts over an 80% reduction. The United States has been slow to implement this initiative but has set a deadline for October 1, 2015 as the liability shift date. Converting to EMV is voluntary but the consequences of not converting could be expensive. EMV technology uses chip technology called Chip and PIN. This technology replaces the magnetic strip on the back of your card. The chip creates a unique code on each transaction which makes it extremely difficult for hackers to clone information and use in card present transactions. Conversely, the current "swipe and signature" strip cards use static data which hackers can steal and use easily. WHAT IS THE LIABILITY SHIFT? This October 1, 2015 date denotes what will be known as "the liability shift". This is when the government says that when there is a fraudulent transaction the entity with the lesser technology bears the cost of the fraud. If a merchant is still using the old technology of a magnetic strip swipe and signature card the merchant is liable for the fraud. BUT, if the merchant has Chip and PIN technology and the bank hasn't issued the consumer a new smartcard the bank will bear the cost of the fraud. Finally, if the customer uses a smartcard at a merchant with Chip and PIN technology and there is fraud the credit card company bears the responsibility. There are over 800 million credit and debit cards in the US that are being and will be converted. Most banks and credit card companies are very active in the conversion process but some are not. There will be an estimated $10 billion in credit card fraud liability in the US in 2015. You can avoid this with a few simple actions. WHAT DO MERCHANTS NEED TO DO? Contact your provider ASAP. Don't wait until the last minute or you will expose yourself to new and unneeded risk. Every provider should have a complete set of solutions regardless of your situation. If you use a standalone POS system like the great majority of dealers, the fix is simple. A standalone POS is the machine you have on your sales desk or checkout counter. The new machine will have a slot in the bottom to insert the smartcard so the chip can be read. Your processor should be able to provide you a new machine for well under $200 with no lease or contract obligation if you use their services. If you have an integrated POS or use a gateway system, contact you provider to be sure you can upgrade and become compliant. DON'T WAIT, DO IT NOW! October will be here before you know it. IS THIS ALL I HAVE TO DO? No, you are still required to be PCI compliant. This is the self test you are required to perform every year to prove you have a safe and reliable environment for the handling, transmitting and storing of consumer data. Most providers have required this certification for 4 or 5 years now and you will have to continue to qualify each year. If you would like additional information, there are various sites that can help. The major credit cards, VISA, MasterCard, and American Express, all have guidelines dedicated to EMV on their respective sites. You can also contact your provider and they should have a full team of experts that can help you with this process. B U Y I N G G R O U P N E W S AVOIDING CREDIT CARD FRAUD WITH EMV RO

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