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Merchants beware the EMV fraud liability shift

October 2015 heralds a liability shift via in relation to card-present fraud – and merchants will become the responsible party.
All parties involved in the card payment ecosystem are currently updating systems. That October 2015 deadline is looming but some still expect migration to be slow.

“Don’t expect a big bang in October of 2015,” says Doug Johnson, vice president of risk management policy for the American Bankers Association. “In terms of rollout, we expect about 50 percent of banks and retailers to be completely transitioned over. It’s going to take a little time to adapt.”

EMV fraud liability

The US marketplace accounts for nearly half of all payment cards and terminals. Once EMV migration is complete, the US market will dramatically change overall payments acceptance.

The EMV fraud liability and a merchants’ responsibility

Merchants, however, need to realise that after October 1, 2015, the least compliant party in an EMV chip card transaction will be liable for any card-present fraud.

Given that card schemes have demanded EMV adoption, and issuers provide the chip cards, it is highly likely that after October 1, 2015, it will be merchants that will be the liable party. Merchants, in other words, need to ensure that their systems are EMV-enabled. This would usually lead to a serious internal systems revamp.

But wouldn’t it be great if there was a simple and cost-effective solution? One that would not require wholesale change to your payment processing system?

Luckily for US merchants, Aviso has already developed the solution. It is called the EMV Wrapper.

So, what does Aviso’s EMV Wrapper do?

Aviso’s EMV Wrapper product achieves EMV migration without wholesale change to a customer’s infrastructure. Crucially, it is cost-effective, quick and simple.

Our EMV Wrapper surrounds the existing payment system and handles the complexity of EMV.
This great product provides EMV compliance without changes to existing applications, significantly reducing our customers’ migration risk. It can sit anywhere in the payment stream to manage EMV compliance for our customers be they merchants, issuers and/or acquirers.

US nearing 1 billion payment cards

The EMV market is about to explode and merchants will need to have a safe, reliable and easily integrated system to accept EMV chip card. Our EMV Wrapper is the answer as merchants need to be aware of the EMV fraud liability shift. Currently, there are between 17 and 20 million chip cards in use in the US. By December 2014 it is estimated that there will be more than 100 million cards in use.

By the end of 2015, the Aité Group estimates 70% of U.S. credit cards and 41% of debit cards will be converted: akin to nearly 1 billion payment cards. By 2017 it is estimated that 98% of payment cards in the US will be EMV chip-enabled.

This is a long process, the US is halfway through, but when it is finished it will change the global marketplace as it accounts for nearly half of all payment cards and terminals. One of the positives for EMV migration in the US is that they can learn from the mistakes of others.

“We have the cumulative knowledge of the rest of the world’s migrations, [I guess there are some advantages in being last] and cards and terminals are at a better price point and have better availability,” said Carolyn Balfany, senior vice president of product delivery for EMV at MasterCard, in a recent interview with Forbes.com. “All those factors and the pure competitive nature of the US will accelerate the migration. While other countries took 5-10 years to migrate, we think the US will migrate in a more compact timeframe.”

Contact us

For more information on our EMV Wrapper just contact us at info@aviso.io or follow us on Twitter and LinkedIn.

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