And here’s why (beside the fact that it’s mandatory):
The chip: I hate it. You might hate it too. Why? Because it takes an extra minute to process my transaction and in this world of split-second everything, that extra minute makes me cringe. However, when I go to a merchant recently affected by national fraud scandals, I have to admit, even with all my impatience, I’m actually glad they use the chip. Not a week goes by without another headline in the news about fraud that took place at this vendor or that one. As much of a pain as it is to wait while that chip processes my purchase, the pain of fraud taking place on my account is much more time consuming (and costly).
We’ve talked before about the making the move to EMV and the cost of compliance, but what is the benefit to your institution?
Liability Shifts: According to the recent deadline imposed by major U.S. credit card issuers (MasterCard, Visa, Discover and American Express), the liability for fraudulent transactions shifted to the party who is least EMV compliant in a fraudulent transaction as of October 1, 2015. That means exactly what you think- if you are supposed to be chip-compliant, and aren’t, then your institution is more than likely the “least EMV compliant” and is liable for the compensation of fraudulent transactions. Ouch.
The potential for less Fraud: And we all know, less fraud means everyone wins. The UK adopted chip technology in 2004, and since then, lost or stolen card fraud has been reduced by 61%. Less fraud means less liability which means less potential for payouts.
Cost Savings: Payment brands are working to ensure that all chip-bearing customers can pay at establishments that are chip enabled, and have introduced programs that waive a merchant’s annual PCI-DSS audit if 75% of the respective payment brand transactions are processed through a dual-contact and contactless EMV certified device. 1
To read more about securing your institution against cyber fraud, read our free eBook: Data Breach Detection and Defense, Making Your Institution Less Vulnerable: