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The times they are a-changin.’
Although Bob Dylan’s famous folk song wasn’t about the way we’ll be using our credit cards in 2015, it certainly could have been. Because, as of Oct. 1, what happens when we slide our credit cards into a credit card processing machine changed.
The initial change shouldn’t be a big deal for consumers. But for retailers, it’s huge. As of Oct. 1, liability and losses due to fraudulent credit card transactions shifted from the card issuer to the merchant. Prior to this, most of the liability lay with the credit card issuer, who was stuck with the bill if an identity thief stole your credit card and made fraudulent purchases. Now, if the consumer uses a “smart” (or EMV) credit card, that liability shifts to merchants, giving them a big incentive to make the transactions more secure.
What’s an EMV card? EMV stands for Europay Mastercard and Visa, which are the three companies that developed the technology. These “smart” cards contain a microchip that generates a unique, one-time code that is needed for each transaction to be approved. A thief might be able to steal that number, but he won’t be able to use it again because these numbers are only approved once and are never re-used.
Unfortunately, the EMV technology does not yet stop fraudulent use of a smart card in No Card Present (NCP) commerce, such as telephone and internet purchases. Instead, the new technology is intended to combat card-present fraud in stores. So, EMV technology won’t stop all fraud, but it’s a good start.
Things will be changing for consumers, too. They’ll likely see many more EMV-compatible card readers popping up in the next couple of months, and they operate a little differently than the old, familiar readers that were made to accommodate cards with magnetic strips. Instead of swiping, you’ll insert your card into the card reader until prompted to take it out.
The process takes a little longer than the quick swipe of your card, so be patient. And, since your card will be out of sight, it might be easy to forget about it, especially if you’re in a hurry, so don’t accidentally leave it behind.
EMV cards look a little different, too. They don’t have the aforementioned magnetic strip on the back. Instead, they should have a small picture of a microchip on the front. However, during this transition phase, some cards may actually have both to accommodate those merchants or countries who do not yet have EMV technology.
If you don’t have an EMV card, contact your credit card issuer to find out when you can expect one. Many issuers are phasing the new EMV cards gradually, as old cards expire.
If you’re a merchant and face the risk of being liable for credit card fraud, you won’t want to delay updating to EMV technology. As Bob Dylan would say, “for he that gets hurt will be he who has stalled…Yes, the times they are a-changin.”