Everything You Need To Know About EMV Liability Shift

Starting on Oct 1, 2015, merchants, card issuers, and all point of sale transactions in the US will shift to the EMV (EuroPay, MasterCard, Visa) chip card technology. EMV technology is meant to enhance safe and secure card transactions in the US.


The Need for EMV Chip Card Technology

Most cards in the US currently use the magnetic strip which is susceptible to counterfeit and hacking. This has resulted in at least half of the world credit card fraud occurring in the US. To date, countries that have implemented EMV technology have reported a significant drop in card fraud as compared to magnetic strips. This is one factor that led Visa and other processors in the US to introduce EMV technology.


What Does the EMV Liability Shift Actually Mean?

Currently, if a card belonging to a customer (card user) is used fraudulently, the card issuer will be liable for any losses incurred. Starting October 1st 2015, this liability may no longer lie with the card issuer but possibly with you (merchants). Any merchant who has not implemented EMV technology at their points of transaction will be liable if there is any card fraud on the user’s card.


The liability shift was specifically designed to encourage card issuers and merchants to embrace a more secure card transaction method.


Chip Card vs. Magnetic Strip

Unlike the magnetic strip which had a black strip on the back for swiping at the point of transaction, chip cards contains a microchip at the front of the card that has to be inserted at the transaction devices to be read. The magnetic stripe card contains static information making it easy for duplication and eventually fraud while the chip card provides dynamic information for authentication which changes for each transaction thereby making it harder to counterfeit for fraud. The chip card does not at all relate to online transactions, and it does not broadcast wirelessly.


What Makes the EMV Chip Card Secure

The main benefit of EMV chip cards is security from fraud as a result of counterfeit cards. This is achieved through its chip card encryption. Every chip card has an embedded secret number which is protected by using public key cryptography. In addition, the chip performs self-cryptographic operations to authenticate itself. The encrypted microchip will generate a one-time unique code to authenticate any transaction making it impossible for in-store fraud. Moreover, the customer will need to enter their pin to authorize the card transaction.


Why You Should Get an EMV Compliant Card Reader

As a merchant, you will be required to get an EMV compliant card reader by October 1st, 2015 to avoid liability for fraudulent transactions. If you only process cards over the internet, phone, or other means, this EMV process might not be as important. We recommend discussing your options with your Managed IT Support provider.



ATM and automated oil dispensers have until October 2017 before EMV liability is transferred to them. The liability will not apply in certain instances like fraud as a result of card theft or user negligence.


Visa, IT Network, PCI Compliance, chip cards, Run Networks