News

EMV and Chargebacks

Sep 20
2016

EMV or chip card technology, long used in Europe, makes it harder for criminals to produce counterfeit credit and debit cards. EMV chip technology is becoming the global standard for credit card and debit card payments. Chip-enabled cards are standard bank cards that are embedded with a micro-computer chip. Some may require a PIN instead of a signature to complete the transaction process. Unlike magnetic-stripe cards, every time an EMV card is used for payment, the card chip creates a unique transaction code that cannot be used again. EMV technology will not prevent data breaches from occurring, but it will make it much harder for criminals to successfully profit from what they steal.

Following an Oct. 1, 2015 deadline created by major U.S. credit card issuers MasterCard, Visa, Discover and American Express, the liability for card-present fraud shifted to whichever party is the least EMV-compliant in a fraudulent transaction. So, that means that in most instances, if a restaurant does not have EMV technology and there is card-present fraud because in the use of a chip-enabled card, then the liability will rest with the restaurant. The restaurant industry has been slow to embrace EMV technology for a number of reasons, and there has been an uptick in the number of chargebacks against restaurants as businesses that do not have EMV/chip technology have been targeted.  Additional information in the Resource Center.

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