Six months after the October 2015 Liability Shift – merchants are experiencing a harsh reality – there was more fraud going on than they knew about… and now the chargebacks are running like a leaky faucet.
Seven months in and many businesses with Computer Point of Sale solutions are still hearing from their dealers that EMV is 30 days away – and they are not even close – Now the Card Brands are putting another hurdle in place with EMV with new guidelines that could slow more companies down in putting a fully integrated solution into place.
Many smaller POS companies are using Semi-Integrated solutions so they can deliver EMV.
A few merchant including Walmart are resorting to lawsuits over EMV.
Chargebacks have more than doubled since the liability shift and fraud is not slowing down, as more merchants become EMV compliant the ones who are still waiting will become bigger targets. The fraudsters know who has EMV and who does not and they are taking advantage of a few industriesright now – restaurants, nightclubs, bars are at the top of the list – next high end retail, unattended vending machines with high end product – and fraud on the Internet has increased as well.
If you haven’t upgraded to EMV your business is liable for a good portion of the chargebacks that the banks were previously eating.
Your liability starts when you swipe a chip card. If there is fraud or a dispute involved, you will be the one absorbing the financial loss.
What is worse? Processing or swiping a counterfeit card. You may think that you’re off the hook because there is no chip on the card, but there’s no way to know when you are using a non-EMVterminal or Point of Sale system. If you swipe a card and it has no chip and you are using an EMVmachine – the machine will say insert chip. So when you swipe you are liable!
Merchants should not be liable for chargebacks on valid cards without a chip. Some merchants are claiming that they are getting legit cards and still getting chargebacks. Some merchant even send in imprints, pictures etc.., and still lose the chargebacks.
Merchants without EMV are experiencing the most fraud – more fraud then they have ever seen! Criminals are not stupid they will avoid merchants with EMV terminals.
The only way to win the war on EMV fraud is to process your transactions with an EMV terminal – It is all about the CHIP!
Best Practices to follow:
- Always process chip cards by inserting the card and following the instructions on the terminal. – Never swipe or key enter a card with a chip – if it does not work ask for another form of payment.
- Never swipe or key in a chip card, if you do – you are not protected!
- If a chip card transaction is declined, do not swipe or override, ask for another form of payment.
- Make sure all receipts are signed.
- Avoid Key Entering Cards at all costs in a card present environment.
- Some Chip Cards ask for the Pin – if the card holder does not know the pin they need to contact their bank – many banks are speeding up the switch from Chip and Signature to Chip and Pin for increased security!
- Always check receipts when processing a credit card to make sure the last 4 digits that are printed on the receipt match the last 4 digits on the card. While we have not seen a fraudulentEMV card there are still mag-stripe cards out there and you need to protect your business against losses.