EMV Chargeback Relief Gives Merchants More Time To Upgrade

EMV Chargeback Relief Gives Merchants More Time To Upgrade

We are quickly approaching the one year anniversary of the EMV liability shift.  The transition to EMV has been rocky at best and quite a pain point for many merchants and processors.  Slower checkout times, delays in certifications, and  the lack of software updates have forced small business owners to hold off on upgrading their terminals to the new EMV standard.  Unfortunately, some merchants who opted to wait on upgrading to an EMV terminal or updating their software were hit with a new problem, Chargebacks.  After the October 2015 deadline the chargebacks due to stolen or counterfeit cards were passed on to the merchant and chargebacks spiked by over 50%.  Merchants who had never before seen chargebacks were starting to see them more frequently.  Merchants fought back with a class action lawsuit and Visa recently announced a new policy to ease the pain and give merchants a little bit more time to upgrade.

Part of Visa’s new policy will stop all chargebacks for counterfeit fraud under $25 from going to acquirers and their merchants, effective July 22. As of October, it will also cap at 10 the number of counterfeit card chargebacks of $25 or more an issuer can send back to merchants on any single card account. Issuers will have to take responsibility for any such chargebacks after that.

 This is great news for small businesses that have decided to wait on upgrading to the new EMV standard.  The policy end in April of 2018 so merchants will still have to upgrade to EMV, but it does buy time for merchants who were waiting until more of the bugs were worked out of the system.  With Visa and Mastercard speeding up the certification process, now is a great time to upgrade your terminal if you have been holding off.  Give us a call and let one of our experts find the best EMV solution for your small business.

EMV Readiness Infographic

Today we’re sharing the Strawhecker Group’s Infographic which gives statistics about how “ready” merchants were projected to be for the EMV switch October 2015.

What does EMV mean?

EMV, short for Europay, MasterCard, Visa, cards also known as chip cards are the newest technology to be adopted in the US payment industry. The cards are more secure because of the chip which is embedded in the card. During a transaction, a customer inserts his or her card into the EMV compatible terminal and the authentication is dynamic instead of static, meaning the terminal interacts with the chip rather than the magnetic stripe.

Unlike a traditional magnetic strip card, chip card data is less susceptible to fraud because it cannot be stolen with a cheap skimmer. Unfortunately, half of the world’s credit card fraud happens in the US, even though the US only accounts for a quarter of the credit cards in the world. The EMV adoption is a much needed advancement in the payment industry, especially since we’ve seen a huge increase in data breaches.

Both MasterCard and Visa have set dates in October 2015 for the magnetic stripe card liability shift. Once this happens, merchants will be responsible for fraudulent transactions using a magnetic stripe card. Even if a merchant has not been affected by fraud in the past, as the industry becomes more secure criminals will start to look for the weak spots or merchants who have not made the switch to EMV compatible terminals.

EMV Chargeback Infographic FINAL

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