By now you have likely heard about the October 1, 2015 EMV Liability Shift. Simply put, the Liability Shift means that the liability for fraudulent cards falls on the party who is the least EMV compliant. For example, if you process a chip credit card using a swipe-only terminal, you may be liable for the fraud. If the card holder does not have a chip card, the merchant would not be responsible as the liability would fall on the card issuer. You can learn about different scenarios here: Liability Shift.
With the liability shift, many are wondering if they need to migrate to EMV. The short answer is—yes. Eventually, businesses who take card-present payments will make the switch to EMV. There has been a push to migrate before the October 1st Liability Shift, but at this point is it necessary for a business to go through the time and cost to upgrade? For card-facing merchants, first evaluate how much card-present fraud you currently experience. Some industries have lower rates of fraud than others and may not need to make the switch immediately. Next, merchants should have a discussion with their Merchant Service Provider to get a true understanding of their fraud threshold.
To Migrate or Not to Migrate
Research shows the migration to EMV will take time. Here are the latest findings:
- 29% of business owners said they intend to migrate to EMV by October 1st.
- 21% stated they never plan to upgrade.
- In June, Javelin Strategy & Research predicted that 75% of merchants will not be EMV capable by the October 2015 deadline.
- Wells Fargo stated that less than half (49%) of small businesses who process retail payments are not even aware of the Liability Shift.
- Among business owners who report accepting Point of Sale card payments, 31% say their existing credit card processing systems can accept chip-enabled cards.
Merchants who haven’t migrated may start to understand quickly how the liability shift affects them when they receive their fall statements. However, in this case, merchants may not be able to turn on a dime. EMV preparedness and certification is a lengthy process.
TC IPA™ Integrated Payment Application
We are currently moving our EMV functionality into production for our new cloud based integrated payment application, TC IPA™. Built to address EMV and security, the TC IPA product offers a semi-integrated approach where TrustCommerce will interact with third-party applications and the device. In its basic form, it will relieve our clients and their third-party software solutions of having to go through their own EMV certification and will come with the security features TrustCommerce is known for, such as encryption and tokenization with the goal of maximizing PCI DSS scope reduction. More will be shared on this dynamic product and its capabilities as we complete development.