There are so many buzzwords being talked about in the payments arena that it can be difficult to keep up. Combine that with the fact that there seems to be a new data breach every week, and your head will be spinning. While these new technologies are all exciting and could possibly help to offer a solution, EMV is considered the global payments standard, and the deadline is approaching for a shift of liability for fraudulent debit card transactions.
EMV stands for Europay, MasterCard, and VISA. EMV cards, which are already common in Canada, Europe, and Asia, rely on microchip technology that is more secure than the magnetic strip technology currently seen on debit cards. Card networks, such as MasterCard and VISA, have set a deadline of October 1, 2015 for merchants to adopt the technology. As of this deadline, the party that has made the investment in EMV is protected from financial liability for card-present counterfeit fraud losses. If neither or both parties are EMV compliant, the fraud liability remains the same as it is today. What does this mean for your credit union? If you have not adopted EMV by the deadline and your member has fraudulent transactions at a merchant that uses EMV technology, your credit union could be liable for the loss.
According to our sister company, The Members Group (TMG), nearly 70 percent of debit card issuers plan to offer EMV cards in 2015 – however, only 7 percent currently issue them, and only 12 percent plan to before year-end. This leaves a very large percentage who either have no EMV plans, or who have yet to roll out their program. If you haven’t begun the EMV discussion, I encourage you to do so.
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