Beginning October 2015, there is a significant change in the card brand rules with regard to a retailer’s liability for counterfeit credit card fraud. Over the past several years, the credit card industry has been encouraging banks and retailers to migrate to EMV technology, which is sometimes referred to as “chip-and-PIN” or “chip-and-signature”. EMV, which is named after the developers of the technology (Europay, MasterCard, and Visa), is a technical standard, that includes a microprocessor physically embedded in a plastic credit card. The microprocessor stores credit card data. When the card is inserted into an EMV enabled card-reading device at a retailer, the device authenticates the card using cryptology. The result is that EMV-enabled cards are harder to skim, or counterfeit.
Each of the major card brands has attempted to encourage retailers to invest in point of sale readers that are capable of reading an EMV chip by announcing changes to their card network rules that went into effect in October of 2015, that shift more liability for credit card breaches to retailers (and their merchant banks) if the retailer does not have card readers that support EMV technology. Learn more about the fraud liability shift and implementing EMV technology here.