Verifone EMV compliant terminals

October 2015 is starting to loom large over the U.S. payments industry. That’s when the much discussed liability shift kicks into gear for most merchants.

Prior to that date — except for fuel dispensers, which kick in two years later — the card issuers have absorbed, and will continue to absorb, the costs of card fraud (some of which may have been partially assessed downstream in the form of penalties). Each has adopted a “carrot and stick” approach to steer acquirers and merchants toward EMV compliance, but essentially the liability for the cost of card-related fraud shifts to the weakest link in the payments chain.

For example, if an issuer didn’t provide the consumer with an EMV card, but the merchant has installed EMV terminals, then the onus is on the issuer. If the issuer and acquirer have both implemented EMV but the merchant hasn’t, then he or she is the weak link and will bear the cost of the fraud.

Each brand will have its own implementation requirements, regulations and fees, so much remains to be spelled out. But, we can help in deflating some of the misconceptions that have cropped up around EMV by providing our Top 5 Myths of EMV list.

Myth #5: It’s going to cost me to upgrade to EMV. Well, yes and no! This is really one of those “you can pay me now, or you can pay me later” situations. Merchants aren’t legally obligated to buy EMV devices, but if they don’t, then the potential cost of fraud liability in all likelihood will vastly exceed any savings from not upgrading. Many smaller merchants are using equipment that has to be replaced anyway, per Visa’s directive that “all pre-PCI attended POS PEDs must be retired by 31 December 2014.” Furthermore, PCI PTS Version 1.x devices achieved “end of life” status this past April, so they can no longer be purchased or newly deployed. Large retailers have already begun the transition, having waited for certainty on EMV directions to initiate system wide equipment upgrades.