October 15 of this year is the target date for retailers to implement the new EMV credit card standard. Retailers are not mandated to have the new technology in place, and in fact it is estimated that over 50% of small (under 1million in annual sales) will opt not to be complaint. Their feeling is that they are small and will not be targeted by hackers. This is high risk stance considering the potential penalties and charge backs based on the EMV liability shift. Here are 6 things you should know about the Liability Shift.
- Banks will no longer be the only party liable for the cost of fraudulent activity.
- Liability will fall to the least compliant party
- A non-complaint retailer still using swipe and signature would be liable if loses resulting in their inability to process chip and pin cards
- The bank or processor would be the responsible for fraudulent activity for retailers who can process chip and pin transactions
- Retailers who have chip and pin technology in place can also process contactless payment options ( NFC, Apple Pay)
- Retailer who cannot process the new chip and pin credit cards will be viewed by customers as less secure