What is EMV card liability shift?
On October 15, 2015 merchants in the U.S. are required to shift their card readers to the new EMV chip technology. This change shifts liability to the merchants to better protect consumers from fraudulent purchases occurring at their terminals. You will also see financial institutions shifting their cards to this EMV technology in the coming years, although at this time it is not required for financial institutions to make the switch.
Why aren’t financial institutions making the switch to the new EMV chip card right away?
It’s expected to take another 10 years before a majority of American issuers (financial institutions) adopt the EMV chips. The cost for a credit union to migrate from the magnetic stripe to EMV chip is about $25,000 to $60,000. Meanwhile, counterfeit fraud costs are only on average $0.03 per swipe.
Simply, it’s still early and like with every other technology advance in recent years, financial institutions must take costs and risk reductions factors in account to justify the pricey EMV switch.
Will you notice any changes when you use your card?
Yes, from October 15, 2015, if the terminal is chip-enabled (as required), it will prompt you to insert your card instead of just simply swiping as before.
What else should you know about EMV technology?
Although the transition to the EMV chip is expected to lead to less production of counterfeit cards, it will also encourage fraudsters to move to new areas of vulnerability. If counterfeiting physical cards is harder, criminals will naturally turn to buying items online with stolen credit card numbers.
For example in the United Kingdom, where EMV technology is widely used, online fraud rose 79% in the first three years after the country switched to chip cards, and it more than doubled in Australia and Canada, according to Aite Group.
For Bridge Members, the best advice is to pay closer attention to account statements to detect suspicious charges, and to review your credit reports periodically to ensure they’re accurate.
If you have any questions give us a call at 800.434.7300 or contact us today.