It’s been a little more than two years since the EMV (Europay, Mastercard, Visa) liability shift took place in October 2015. Although there’s been a gradual adoption of this technology, there are many merchants who still only offer customers credit card swipes, and not EMV chip readers, which are encrypted and help protect against fraud.
This begs the question: With all the emphasis on switching to EMV, is it actually required of merchants?
Firstly, what was the significance of the EMV liability shift?
The October 2015 EMV liability shift marked the official transfer in accountability regarding in-store fraudulent card transactions within the United States. Rather than the card’s issuing bank being held responsible, in certain cases, the business at which the fraudulent activity took place became legally liable—specifically, when a fraudulent transaction involves an EMV card at a non-EMV-compliant business.
Does this mean merchants are required to become EMV-compliant?
While this fact certainly encouraged merchants to, at the very least, ask their credit card processor about EMV card readers, they didn’t need to become compliant. That is, it wasn’t—and still isn’t—mandated by law to adopt EMV technology.
Keep in mind, however, that many consumers are utilizing this technology.
Although merchants may not find themselves in any sort of legal trouble for not being EMV-compliant, they may face backlash with some of their customers, and fall behind their competitors.
As reported in a December 2017 article by Finextra, an independent news source with a focus on worldwide financial technology, data from EMVCo itself shows that “58.9% of card-present contact and contactless transactions globally were EMV®-enabled between July 2016 and June 2017.”
“The latest EMVCo data shows that the United States experienced the largest year-over-year increase, with 31.4% of transactions being EMV-enabled, compared to 7.2% in the same period the prior year,” it adds.
These statistics not only suggest that the majority of consumers own an EMV card, but that an increasing number of merchants, specifically in the United States, are adopting the technology, and thus, enabling customers to utilize these cards. Retailers who do not offer this service risk losing customers who no longer feel comfortable using the traditional credit card’s magnetic stripe.
As a result, learning more about EMV card readers and adopting this technology should be a top priority for all merchants.