US Bankcard Services Industry Blog

Friday, March 18, 2016

Merchants are Feeling the Sting for Lack of EMV Implementation

EMV Enabled CardWhat EMV Sting?
Three months after the EMV liability shift, merchants who have not focused on their EMV implementation are beginning to experience more chargebacks than they had previously anticipated. Prior to the EMV Liability Shift on October 1st, 2015, fraudulent transactions were generally assumed by credit card issuing institutions. Now with the upgrade to the more secure EMV protocols, credit card issuers have now shifted the liability over to merchants who have not yet prioritized their EMV compliance. In other words, merchants who have not yet switched over to EMV-enabled terminals now face a much higher risk of having to deal with the threat of potential fraud and chargebacks. Most countries within the EU, Asia, and Africa have been using EMV for years now and attest to its capacity to fight fraud but the US has been very slow to adopt the new system. This means that merchants across the country are suddenly huge targets for credit card scammers.

Chargeback Predictions for 2016
               
Many experts within the credit card processing industry believe that the first wave of chargebacks should have been mailed out to merchant inboxes sometime early last month. Chief Executive of Merchant Services for JP Morgan, Mike Passilla, has been preparing his call centers for a sudden spike of calls from disgruntled merchants regarding chargeback issues. Passilla expects this spike to plateau for at least 6 months as more and more merchants get stung for EMV non-compliance.  Many experts agree that after the first waves of chargebacks wreak havoc on unsuspecting merchants, other merchants will be spurred on to protect their businesses by implementing their own EMV terminals. With more and more merchants switching over to EMV, consumers will surely follow suit by learning to better adapt to their own chip cards. In my opinion, I think merchants should not procrastinate with their EMV implementation. Although the EMV migration was not mandated with the passing of the liability shift, why wait until you have no other choice?


How EMV Protects Merchants from Chargebacks
               
Mag-stripe technology is outdated and has been in use for nearly half a century. During that time, credit card counterfeiters have learned just how easy it is to replicate the stored information. The information that is stored on mag-stripe cards is static which makes it really easy to pirate information for later use. EMV chips are literally tiny computers that use a system to encrypt sensitive information for every single transaction it is used on. It is this encryption of information that makes it incredibly difficult for counterfeiters to replicate. In fact, EMV has been so successful in combatting fraud that in places like the UK, credit card fraud has dropped over 70%. Why wait until it is too late to protect yourself from chargebacks and fraudulent charges associated with EMV non-compliance? Inquire with US Bankcard ServicesInc. at (888)888-8USA to find out more about EMV implementation for your business today!