The EMV liability shift in Canada and your business

EMV liability shift

In previous articles, we’ve talked about what EMV is and why it’s an important upgrade for any business. EMV certifications have had a huge impact on the reduction of card-present fraud worldwide. What is most important, however, is the liability shift that EMV technology brought on with it. The liability shift was official as of October 2015. This wasn’t a major even in Canada because most Canadians already using their chip & PIN. It is important to note what this means for your business, though, if you still don’t have the equipment capable of taking EMV cards.

What does the EMV liability shift mean for my business?

Most credit cards still have a magnetic stripe for swipe purchases. Even though they’re equipped with the chip and PIN technology required by EMV, machines need the magnetic stripe for certain cards. These retailers leave customers with the mag stripe as the only means of payment. And this is where the EMV liability shift occurs. Previously, the credit card company would be liable for any fraudulent transactions with their card. Now they will only be liable if fraud occurs at a payment terminal equipped to take EMV payments. If EMV tech malfunctions, the card provider is on the hook instead of the retailer. If a payment terminal can only accept payments through swiping a card (i.e. it cannot read chip cards), the merchant that owns that payment terminal would be liable for any fraudulent transactions processed.

This shift in liability is there to make sure that all retailers comply with the new EMV security regulations. Upgrading payment terminals, attended or unattended, is important for all retailers. Doing this protects them from the financial and legal consequences of accepting counterfeit, stolen, or fraudulent credit cards through swipe transactions. Remember to take a look at all your attended and unattended payment terminals to make sure they’re EMV certified for both your customers’ safety and your own, don’t let the liability shift catch you by surprise. If you are unsure about whether or not your terminal is EMV certified, check with your payment processor or POS provider.

Upgrading to EMV is just another way to avoid unecessary risks. Take a look at the difference that EMV technology has made in credit card fraud in Canada compared to the USA. Credit card fraud: Canada vs. USA

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