EMV®/Chip Cards and the liability shift going into effect on October 1, 2015
You may have heard that the United States is transitioning to full adoption of EMV chip-enabled cards to reduce credit card fraud. This means that there will be changes to the way payments are made and accepted. We wanted to share a bit more about EMV with our QuickBooks clients.
What is EMV?
EMV is the global standard for smart card payments and acceptance devices, named after the developers: Europay, MasterCard, and Visa. EMV microchip-enabled cards provide stronger security and other capabilities not possible with traditional magnetic stripe cards.
An EMV chip-enabled card has a square microchip on the front of the card and is something you may already have in your wallet. A special card reader is required to read these EMV chips, but you can still swipe the cards through the same magnetic stripe readers you’re using today.
To encourage businesses to adopt the more secure technology of EMV/chip cards, a liability shift is going into effect on October 1, 2015. Today, if businesses swipe a counterfeit or stolen card, the bank assumes the loss. Starting in October, if businesses swipe a counterfeit or stolen EMV/chip card using a magnetic stripe reader, they could be liable for that charge.
What this means for QuickBooks clients
If there is any concern around fraudulent credit card transactions, you may want to get an EMV reader. An EMV device reads the microchip embedded in the card and authenticates that the credit card is valid. This reduces your liability for fraudulent transactions.
Some questions to consider:
- Do you sell to customers that you don’t know?
- Do you sell expensive items?
- If you accept a counterfeit or stolen credit card and can’t collect the funds, would that have a material impact on your business?
What you need to do
The transition to EMV cards and EMV technology will not happen overnight. For now, there is no action needed, other than gaining a better understanding of EMV. Changes to QuickBooks Payments products are coming soon and Intuit is working hard behind the scenes to ensure a smooth transition.