What Has Changed Since the Liability Shift?

Posted By: Art Harper | November 30, 2015 | 0 Comments

This seems to be the million dollar question with issuers and merchants. In order to best understand how to answer this question, we need to understand the landscape.

The liability shift for POS terminals took place in October and while everyone was preparing for this event, no one should have thought non-EMV terminals or cards would stop working. The idea was for issuers and merchants to be more proactive and cognizant in providing their card holders with the most current technology to prevent card present fraud.

First, let’s summarize the percentages of card fraud. On an industry average, card present fraud represents about 60% and card not present about 35% of a card program. Many consumers and some issuers may have thought the card present fraud will dissipate to almost nothing immediately after October. However, we will not begin to see these reductions in fraud for 8-12 months. Why so long? Because the market will need to see more EMV cards, terminals and transactions take place versus mag stripe.

Second, the industry should be watching/focusing on those merchants and issuers that did not upgrade to the EMV technology. Why the focus? As the U.S. has been known for years as the weak link in card fraud, these entities that have not enabled EMV will be the hackers’ primary targets. As we have seen with the influx of ATM skimming before the 2016 liability shift, we will see those same hackers take aim at those cards and terminals that are not utilizing the EMV technology.

In conclusion, if your institution has upgraded to the EMV technology, you should feel safe and promote those technological benefits to your membership. If not, you should get into an EMV certification queue as soon as possible for your cards and ATMs.

Art Harper

Art Harper

Art is responsible for the management and growth of EMV products and services and is a member of the EMV Migration Forum participating on the ATM and Debit Working Committees. He has conducted over 50 EMV educational sessions reaching over 1500 people. Art has been involved in providing his perspective on the EMV movement in the U.S. with articles in the CU Times and CU Tech Talk.
Art Harper

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