Last year at this time, news feeds in the payment card industry were abuzz with information about the Chargeback Liability that was taking place in October of 2015. Not to disappoint, new deadlines have been set for October of this year that will have card security pundits talking. The first impacts Visa card issuers, and will be a blessing to both consumers and merchants when it comes to diminishing fraudulent card use via alerts. The second brings EMV back to the forefront, with a new deadline for ATM's to accept EMV chip cards. Here is some education on both deadlines:
Effective October 14, 2016, Visa Rules will require all U.S. issuers of consumer class Visa credit, debit and re-loadable prepaid cards to provide an option to enroll in transaction alerts to their consumers. These alerts will enable cardholders to quickly identify suspicious purchases on their accounts when the chosen method of notification is received (text message, email, or in some cases, in-app push notifications on smartphones). Visa concluded that alerts are a proven method to mitigate fraud. They released findings of an internal study by Javeline Research that found transaction alerts can reduce fraud by up to 40%.
There have been a few complaints from consumers that the alerts will be distracting, or can potentially ruin the element of surprise when gifts are purchased on a join account. It is important to note here that consumers will be given the ability to make changes to the frequency and form they receive the alerts, if at all, as they will be given the option to turn the alerts off. There is no requirement in Visa's rules that will prohibit consumers from turning off the service, there is only a requirement that card issuers offer the program.
If the findings are true, and 40% of card fraud will be reduced by implementing this program, it should be welcome news to both consumers and merchants. And with Visa offering banks and other card issuers with a free program to enable this service for their card accounts, at this time there is hard to find any negative ramifications that can result.
The next deadline to hit the industry in October is once again bringing the focus on EMV, a.k.a chip cards. This shift will be limited in scope to banks, credit unions, and other organizations with ATM's, and the use of MasterCard branded cards. The liability shift deadline for ATM transactions made with MasterCard branded credit and debit cards is Oct. 1, 2016 (Visa's deadline is not until Oct. 1, 2017). While this shift will have limited to no impact for the majority of our readers, it stands to symbolize the commitment of this technology in the US by the payment card industry. Merchants can expect to see more and more cards enabled with chip technology, and that trend is only going to continue. If you have not established a plan for upgrading your POS terminals to accept EMV transactions, the time is now to at least have it on your roadmap.