EMV contact and contactless chip technology – America set for EMV liability shift

Posted on: November 1st, 2011 by level_admin No Comments

Many people in the payments industry were heartened by Visa’s announcement in August that they planned to accelerate EMV contact and contactless chip technology migration in the United States. EMV migration involves the replacement of magnetic-stripe credit/debit payment cards with EMV chip cards (referred to as “smart” cards) and also requires all Point-of-Sale card-acceptance devices to be upgraded to support the chip technology. This is something that has been long overdue, and even large retailers such as Walmart have been calling for some time for the industry in the U.S. to begin EMV migration as we covered back in June 2010.

One key factor of their announcement was that they plan to introduce a U.S. liability shift from 1st October 2015 for all American merchants. This could potentially have a significant impact on merchants as Visa’s press release states that “with the liability shift, if a contact chip card is presented to a merchant that has not adopted, at minimum, contact chip terminals, liability for counterfeit fraud may shift to the merchant’s acquirer”.

Other markets such as Europe have already undergone the liability shift during their EMV migration programmes, and this has lead to high-levels of EMV chip card acceptance across the continent, both by major chains and by small single-site merchants.

Due to the complexity of the EMV specifications, many system providers that have already undergone EMV migration have chosen to license the use of a third party EMV kernel, such as CreditCall’s EMV kernels.