Sweeping new requirements for merchants will cause a significant shift in business liability when credit card fraud occurs.  But many business owners are not ready and even more have not heard about this change in payment processing.

When is the deadline to convert to this technology?

October 1st, 2015 will be when the credit card payment processing liability shift will occur.  Merchants must have EMV chip-and-sign readers setup at all point of sale devices.  Online sales and manual entry of credit card credentials will not be affected.

What is EMV chip-and-sign and how does it change my business’ liability?

This new technology embeds a microprocessor chip in the credit card—this provides a more secure authentication mechanism that does two things:

1) verify the card’s physical presence; and,

2) transit unique data for each credit card transaction – this prevents employees from surreptitiously swiping a customer’s card and selling the information.

The EMV chip is visible on most newer cards as a small brass-colored square (see the image above).

How are payment processing requirements changing?

Vendors that fail to adopt the EMV chip-and-sign technology will be liable for any credit card fraud that happens at their business.  Vendors who do adopt the new technology should continue to enjoy the same level of fraud protection as they have previously.  The new regulations specifically designate the party with the least security or where the breach happened as who will get stuck with liability for it.

How can I prepare my business to avoid additional liability?

Contact your credit card payment processing service and ask:

• how the new requirements effect your account; and
• what steps your business needs to take to prepare.

Payment processing hardware may need to be upgraded, in some cases payment processing software may also need to be upgraded.