Christie Matherne, Credit Card Writer
@christie_matherne
There are no new credit card chip laws, because the government isn’t regulating the U.S. switch to EMV, chip-enabled cards. Nobody will get arrested or fined for using a credit or debit card without a chip in it, nor will merchants face legal consequences for not updating to EMV-compliant payment terminals.
The EMV transition in the U.S. is a push by the credit card industry to stop costly fraudulent charges, because research shows that EMV is a more secure and fraud-resistant payment method. There may not be legal consequences for merchants who don’t adopt chip-and-pin payment processing, but there are financial consequences. Since October 1, 2015, merchants operating without chip-enabled payment systems have been on the hook for fraudulent charges, rather than credit card companies.
Because of those changes, chipped credit cards are becoming commonplace. In 2018, 53.5% of card-present purchases in the U.S. were made using EMV-enabled cards on EMV-compliant payment systems, according to digitaltransactions.net. That’s more than a 10% increase from 2017. And 97% of all payment value in the U.S. happens on EMV-enabled cards, according to a 2018 Visa report.
The transition seems to be achieving its intended effect, too. Merchants with EMV-enabled payment systems have seen a 75% drop in lost fraud dollars since September 2015, according to a 2018 Visa study.
For now, gas stations are the only merchants getting a pass on liability until October 1, 2020. Even though credit card fraud at the gas pump is perceived to be on the rise, the mandate gave those retailers five extra years to become EMV-compliant. That’s because EMV upgrades to gas pumps can be more costly and invasive than upgrades at other types of retailers.
ELIJAH NASH, Annuity Wholesaler
@EliEliO
- Merchants should upgrade their credit card readers to allow customers to insert, or “dip,” EMV chip cards. If they don’t, they will be held liable for any fraudulent purchases made by customers who “swipe” a chip card.
- If a merchant does upgrade to accept EMV chip cards, the credit card issuer instead takes liability for fraud.
- If a customer’s credit card does not have an EMV chip, the issuer remains liable no matter what type of card terminal the merchant has.
It may be an extra expense to upgrade a chip reader, but business owners should do it. Transactions that only use the card’s magnetic stripe rather than a chip are much less secure because the data is easier to copy or counterfeit. Following the new credit card chip laws will protect businesses from costly fraud liability and keep that responsibility on the card issuer. So in the end, it will be less costly for the business.
People also ask
Did we answer your question?