If you haven’t been issued an EMV credit card yet, you will soon. So what are these new cards and why is everyone talking about them? EMV stands for Europay, Mastercard and Visa; it is the global standard for computer chip cards. These cards make it more difficult to create counterfeit cards, thus increasing consumer security during these times of prevalent data breaches. This is a step towards making consumer information more secure, because unlike magnetic stripe cards where the code remains the same for each transaction, EMV cards manufacture a unique transaction code every time the care is used, thus making EMV cards more difficult to forge.
This change comes at a time when consumers want retailers to take more steps to protect their personal data in the wake of largescale data breaches. In a survey by the American Bankers Association, 94% consumers believe retailers should protect personal data, with 70% also believing retailers should install EMV card readers as soon as possible. Most survey participants also expressed retailers should be upheld to the same data security policies as banks to work proactively to address potential security threats.
As of October 1st, merchants who have not switched to EMV card readers are now accountable for any in-store fraud incident. If a store has upgraded their card readers, then the financial institutions are still responsible for the fraud. Essentially, the rule is whichever entity is less secure is responsible, whether a card has not been upgraded to the EMV chip or if the card reader is not EMV compatible. Merchants who upgrade their card readers are protecting their customers and themselves. The fraud liability shift for ATM owners will begin October 2016 and for pay at the pump gas stations the change will occur October 2017. EMV cards may eventually require PINs similar to the system in Europe, but for now, this is a start in safeguarding American’s financial information.