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New EMV compliance deadlines quickly approaching

April 25, 2016

Late last year, so-called tier-one merchants - some of the largest retailers in the U.S. - were required by credit card processing companies like Visa and MasterCard to have point-of-sale devices capable of handling EMV purchases in place.

Late last year, so-called tier-one merchants – some of the largest retailers in the U.S. – were required by credit card processing companies like Visa and MasterCard to have point-of-sale devices capable of handling EMV purchases in place. The reason for the change was that these chip-and-PIN transactions are far more secure than traditional magnetic stripe credit card purchases, and therefore reduce instances of fraud. And while many consumers and businesses nationwide are still getting used to these requirements, more are on the way.

As soon as the beginning of October, ATMs and self-serve gas pumps that accept payments from MasterCard-branded debit and credit cards will be required to have EMV card readers installed, replacing those that can only accept magnetic stripe cards today, according to a report from Credit Union Times. The deadline for similar devices that accept Visa-branded cards is October 1, 2017. Those who fail to comply will not necessarily have any action taken against them, but rather the liability for any and all fraud on their ATMs and fuel pumps going forward will shift completely to them.

More ATMs will soon be able to handle EMV transactions.More ATMs will soon be able to handle EMV transactions.

What’s the impact?
Like the initial liability shift, just before which many companies made the necessary changes to their POS devices, it’s not expected that all affected businesses will necessarily make the immediate move to comply with this rule change, the report said. However, the issues that may arise as a result of the coming ATM and fuel pump liability shift will still be important for any small business that either has a gas station as part of its operations, or (potentially) even just has an ATM on its premises. This is particularly true of ATMs for which the banks have upgraded to EMV payments as well.

“If the ATM owner has gone through the cost of certifying it and it is a [magnetic stripe] card that has been compromised, then the liability goes to the issuer of that card, the credit union or the bank,” Jamie Topolski, director of alternative payment strategies at the Brookfield, Wisconsin-based core processor Fiserv, told the site.

Taking the next step
However, when it comes to getting ATMs ready for the coming liability shift, many industry analysts believe that could be a tough row to hoe, the report said. Some estimates show that only about half of ATMs, at most, will be ready to accept EMV cards by this coming October, the report said. This despite the fact that hundreds of millions of both Visa-and MasterCard-issued cards now come with EMV capabilities.

And while there may be some consumers who are still without such cards, the efforts on the part of these payment processing titans to get more of them into circulation are going to make them nearly ubiquitous in the near future. As such, the ability of merchants small and large to handle EMV payments is critical, even without taking the liability shift into account. The sooner they can become compliant, the better off they and their customers are likely to be.

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