The October 1 EMV Liability Shift is Here. Are you Ready?
October 01, 2015
Most companies utilize credit card transactions in their daily order of business, but are they aware of the October 1st EMV liability shift? Do your clients realize they could be liable for chargeback costs if a customer uses a stolen payment card where charges need to be reversed? If the issuing bank of the stolen card provided chip-enabled cards, but your client only has magnetic strip point of sale systems implemented, your client is the least-compliant component of the payment processing chain.
It is also important to note that privacy (cyber) liability policies do not cover these types of issues. While your client should find coverage available for dealing with a breach of payment card information at his or her location(s), the use of fraudulent cards that were previously stolen elsewhere are not a covered scenario. Keep your client informed of the risks they face by failing to heed the deadline for having EMV chip-card terminals in place and you’ll help them if there’s a breach in the future.
What’s the risk?
The deadline for having EMV chip-card terminals in place for retail merchants is October 1 2015. EMV, or Europay, MasterCard and Visa, is the global standard for credit cards with computer chip technology to authenticate purchase transactions. In an effort to improve payment security, US card issuers are migrating to the chip card technology, forcing merchants and financial institutions to add new in-store systems. Non-compliance could result in merchants being held liable for credit card breaches.
Ensure your clients are compliant with the new EMV implementation requirements, (fuel-pump stations have an extension through 2017). The average cost of an EMV-compliant point-of-sale terminal is around $500. Chip-reading mobile devices such as Square can be purchased for $29-$39.
View our Hiscox PRO Privacy 101 Guide for other privacy and data breach information, including key industry facts, risk management tools, exposures and coverage.