The deadline is upon us. Beginning October 1, 2015, merchants processing credit card transactions will be required to adopt EMV standards, or will be financially liable for counterfeit fraud losses. As a consumer, you may have already received a new personal credit or debit card with micro-chip technology, as banks and credit card issuers in the US prepared for the shift.
EMV (Europay, Mastercard and Visa) creates an open-standard set of specifications for smart card payments and acceptance devices. While cards and terminals will remain part of the consumer-merchant transaction, the magnetic stripe is out of the equation. Instead, EMV chip cards contain embedded microprocessors that provide stronger transaction security and capabilities.
Surprisingly, the US is one of the last countries to migrate to EMV chip technology. But with the recent headlines involving data breaches, it is no surprise that this date was selected to drive the conversion to chip-based cards. As of October 1, 2015, card-present fraud will shift to whoever is the least EMV-compliant in a fraudulent transaction. This conversion requires merchants, or healthcare providers in our world, to purchase new credit card readers.
While banks and credit card issuers will continue to accept charges from magnetic strip card purchases, if a charge is made using a stolen, counterfeit, or otherwise compromised card, all consumer losses will fall back on the merchant if the payment processor or issuing bank has implemented the new chip cards. This includes fines, penalties and damages!
While having a chip-based reader may reduce your risk for fraud, it will not eliminate it. It is imperative that you work with your financial and patient management software companies for compliance. Also, check insurance policies for any exclusions or restrictions on coverage for non-compliance with the transition to chip-based card readers after the October 1, 2015 effective date.