It's now October, and if you don't have your EMV terminal up and running, you are probably already being inundated with chargebacks that you are now liable for, right? It's the Zombie Apocalypse, and fraudsters are knocking down your doors with EMV-enabled cards in hand, to start charging purchases on your Non-EMV POS terminal, knowing you will be responsible for the chargebacks. It's the end of days, and your non-EMV terminal just blew up.
WAIT... that didn't happen? You mean, we saw October 1, 2015 come and go, and the card payment world as we know it did not end? There are two reasons why the EMV Chargeback Liability Shift that started October 1st did not destroy non-EMV terminal merchants: Statistics and Reality.
Some updated EMV stats
According to the latest from Visa:
- Only 40% of retail locations that will be EMV-compliant by the end of 2015.
- 25% of US. debit cards that will be issued as EMV cards by the end of 2015.
- 60% of U.S. credit cards that will be issued as EMV cards by the end of 2015.
Bottom Line: Not everyone has a chip enabled card, and not every merchant has (or needs) an EMV terminal. Which brings us to the reality of EMV...
Reality check: What is your true liability in the Chargeback Liability Shift?
Remember, we are only talking Face-to-Face transactions (EMV Chargeback Liability does NOT impact Card Not Present transactions). Let's review the rules of the liability shift one more time:
- If someone gives you a non EMV card and you process it with a non EMV terminal... there is no change in the current chargeback liability.
- If someone gives you an EMV card and you process it with an EMV terminal... there is no change in the current chargeback liability.
- If someone gives you an EMV card and you process it with a non EMV terminal and it is a COUNTERFEIT fraudulent transaction, then and only then does the liability shift from the credit card issuers to you the merchant.
What are the odds of a fraudster walking in your door today with a counterfeit card that was originally an EMV card, where they stole the mag strip data, then ported over the data to a non-EMV card, and then walked into a non-emv merchant to make a purchase? And reality is, it only takes a simple procedure on the merchant's part for any face-to-face transaction to ensure the third scenario does not come to fruition: Verify the last four digits of the card against the last four digits displayed on the credit card receipt. If they match, there is virtually no chance the card is counterfeit. And you get to live another day!