Chip and Pin USA EMV Liability Shift

Chip and Pin credit and debit cards have been improving payment card security in many developed countries worldwide, but this modern proven fraud deterrent has not yet been implemented in the USA. The standard chip-and-pin technology is also known as EMV for Europay, MasterCard,  and Visa – pioneers of the chip-and-pin payment card format.

As of the end of 2013, several US banks are issuing chip-and-pin cards by request – mainly for use by US residents while travelling internationally. Few if any US merchants are able to accept or process chip-and-pin transactions.

I should note that many US stores do in fact have machines with a chip slot for EMV-style payment cards. Unfortunately the chip-and-pin slot is almost universally disabled, inactive, or not functioning at US merchant locations. The point-of-sale terminals attached to the card slot are usually not equipped with software and/or settings to process chip-and-pin transactions. The stores will likely not spend the necessary time and money to allow EMV transactions until the US “liability shift” deadline (see below).

Recent news headlines of a massive payment card data breach and card fraud with US Target stores makes the need for chip-and-pin technology more clear. These cases of card fraud seem to be more prevalent every day.

To encourage the adoption of EMV technology by merchants, the US payment card industry has created a “liability shift” deadline ( after which a merchant can be held liable for card fraud due to their lack of ability to process chip-and-pin card transactions. Merchants will be highly motivated to process chip-card transactions by the deadline to avoid losses due to card fraud on their sales. This deadline appears to be October 2015 for general merchants and October 2017 for gas-pumps.

Unless serious security flaws are revealed with EMV-style chip technology or the deadline is pushed back, we can expect widespread acceptance of chip-and-pin cards within the US by the end of 2015! As a victim of card fraud in the recent past, I can say that this welcome security improvement for payment cards in the USA is desperately needed and only wish it could be implemented sooner. Hopefully the payment card industry will be able to keep card fraud in check for the next two years as our country’s huge payment card network gets a well-deserved infrastructure overhaul.


About notesbytom

Keeping technology notes on to free up my mind to solve new problems rather than figuring out the same ones repeatedly :-).
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