Phone: 630-495-2282 Fax: 630-495-2260 Map/Directions
 

Rise of chip-embedded credit cards will impact dealerships

April 10, 2015
As credit card companies embrace new technology to make their cards more secure, including chip-embedded security, businesses will be faced with upgrading their point-of-sale equipment or risk potentially facing increased liability for any resulting fraud.
 
The EMV Coalition, an international, private consortium representing MasterCard and Visa, will change merchant agreements by October 2015 to indicate that if a retailer does not upgrade its point-of-sale equipment to be able to process the chip-embedded cards, the liability for any fraud associated with that transaction will shift to the retailer and from the credit card company or issuing bank.
 
Commonly used globally in place of magnetic stripe, EMV chip technology drastically reduces card fraud resulting from counterfeit, lost and stolen cards; provides global interoperability; and enables safer and smarter transactions across cards, contactless, mobile, and remote payment channels.
 
American Express, Discover, MasterCard and Visa all have announced their plans for moving to an EMV-based payments infrastructure in the U.S., with major changes for managing fraud risk taking effect this year.
 
The chip-embedded cards are issued virtually everywhere in the world except the U.S., and the huge increase in credit card-related fraud has led insurance companies and other interested parties to push hard for increased fraud protection.
 
Annual costs of credit card fraud in the U.S. alone are estimated at $8.6 billion, and experts believe that figure could rise to $10 billion or higher this year. The explosion in credit card fraud goes hand-in-hand with a simultaneous rise over the past five years of mobile payments. 
 
In 2010, the total gross dollar volume of mobile payments in the U.S. was about $16 billion. That sum is expected to reach $214 billion this year, an astronomical 13-fold increase in just five years.
 
 

Back