Side-stepping Liability with EMV Compliance

2016 Alliance feature article by Total Merchant Services

Hardly a day goes by when there isn’t a new story reporting massive credit card breaches somewhere in corporate America. In 2015, victims included heavy-hitters such as Hilton, T-Mobile, CVS, and Scottrade.  No sector of business is safe from data assault. As a result, U. S. banks, along with brick in mortar merchants, faced serious pressure to increase credit-card security measures by implementing Smart-Card technology.

Looming Data Theft
“While no one is really trying to steal medical data, per se, data thieves are very interested in obtaining customer credit-card information,” says Andy Elliott, National Accounts Executive, Total Merchant Services. “That makes a medical practice just as vulnerable to credit transmission interception as Target or Home Depot.”

In the past, credit-card companies absorbed costs associated with fraud, but in October 2015, that liability was shifted to merchants – unless they upgraded to an EMV (Europay, Mastercard, Visa) smart card terminal.

Thwarting fraud with EMV
“EMV cards have embedded computer chips that are attached to end-users’ personal account numbers,” Elliott says.  The data is protected in an integrated circuit (rather than a magnetic strip), and there’s a dynamic code that resets after every use. They are almost impossible to counterfeit.

How will Smart Cards Impact Me?
“If you complete an in person sale after October 1, 2015, using the magnetic strip on an EMV compliant card, and that card turns out to be counterfeit, then you will be liable for a charge back for the full amount of that transaction” adds Elliott. “This is new, in the past, you were not liable for any counterfeit credit card transactions.”

Contributed by Andy Elliott, National Account Executive, TMS


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