August 14, 2018
When Is a Credit Card Fraud Deadline Not a Deadline? The EMV Chip.
Posted August 11, 2015
A Number of Surveys Indicate That Some Merchants Are Taking the EMV Chip Deadline as a Suggestion Accepting the Liability For Credit Card Fraud.
October 1 The EMV Chip deadline is coming on fast — ready or not. The answer from many merchants according to several surveys on digitaltransactions.net is NOT! And the negative repercussions of credit card fraud for the “not” merchants could be considerable because issuers and merchants who use non-EMV compliant devices and choose to accept transactions made with EMV-compliant cards assume total liability for fraudulent transactions.
In his digitaltransactions.net story, John Stewart surveys a number of surveys (yes that was intentional) to report that for one reason or another the October 1st, 2015 deadline is not having the same impact on merchants as April 15th has on taxpayers. The following has been excerpted from Stewart’s story and edited to fit our format.
Consumers not in “the chips”
A survey conducted July 9-13 by the Associated Press and market researcher GfK indicates that, of the 41% of U.S. adults who have received a new payment card this summer, just 30% have received a chip card. That works out to 13% of all Americans, according to the AP and GfK, whose survey canvassed 1,004 people.
Among the people who have received a chip card, 35% so far have used it for an EMV transaction. EMV cards are overwhelmingly being issued with magnetic stripes as well as chips, so consumers can still swipe the cards if merchants aren’t equipped with chip readers. Meanwhile, while most Americans who have received a chip card say they understand how to use it, most also say they don’t understand why they’ve received it, according to the survey.
Small merchants still unaware of EMV Credit Card Fraud liability shift
A separate study shows that, on the eve of a crucial deadline, most small U.S. merchants still aren’t aware of the card networks’ impending EMV liability shift, let alone prepared to accept EMV cards. Only 49% of merchants that have up to $20 million in annual revenue and that accept payments cards say they are aware of the Oct. 1 deadline, according to the Wells Fargo/Gallup Small Business Index poll [which] contacted some 600 business owners, of whom 41% accept debit cards and 35% take credit cards.
One third of merchants say they’ll install card-accepting equipment — sometime after the deadline
Among the card-accepting merchants, 31% said they have installed equipment to accept EMV cards. As for the other 69% that aren’t ready for EMV, only 29% said they plan to install the needed equipment by the deadline. Just over one-third said they’ll do it, but some time after October, and another 21% have no interest in upgrading at any time.
Almost half of surveyed merchants can’t see point of installing EMV equipment
The survey…asked [slow-to-install] and not-interested merchants why they [wouldn’t] become equipped for EMV in time to avoid the liability shift. Forty-eight percent said they don’t think upgrading will do anything for their business, while 46% don’t want to shoulder the equipment, software, and training costs. Some 41% of respondents said they aren’t worried about the fraud potential.
Only 15 percent ready
In other results, the survey showed 15% of respondents accept point-of-sale mobile payments through a mobile-enabled reader. Does this mean that the other 85% are not mobile ready, and further susceptible to credit fraud?