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    The Liability Shift Is Coming

    EMV adoption was top of mind among NRF Show attendees

    The coming EMV liability shift for point-of-sale (POS) transactions in-store, set for Oct. 1, was a main focal point of conversation for retailers and exhibitors alike at the 104th annual National Retail Federation (NRF) Convention & Expo, dubbed Retail’s Big Show.

    A number of exhibitors displayed EMV chip technologies, as well as related security offerings at the trade show, which took place at the Jacob K. Javits Convention Center in New York.

    EMV — an acronym for Europay, MasterCard and Visa — was also a primary focus of educational sessions during the convention, including one session entitled “EMV Liability Shift Demystified!” presented by Heartland Payment Systems Inc. executives David Hogan, executive director, and John South, chief security officer.

    Retailers are not required by law to upgrade to an EMV-ready POS by Oct. 1, but convenience store retailers do need to upgrade their devices if they want to avoid responsibility for fraudulent or lost/stolen debit and credit card transactions in certain instances.

    As of Oct. 1, if a consumer presents a chip-based American Express, Discover, MasterCard or Visa card to a retail terminal meant only to accept swipe cards, the merchant is responsible if fraud subsequently occurs. Currently, credit-card issuers are responsible.

    Additionally, merchants are responsible for lost or stolen chip-based cards presented to a magnetic stripe POS in all cases expect Visa, which will continue to accept responsibility itself, explained Hogan. Retailers are also responsible if a chip-and-PIN debit or credit card is presented to a terminal only upgraded to accept chip-and-signature cards.

    Of course, any retailer making the proper upgrade to an EMV-capable POS will have no responsibility for fraudulent or lost/stolen card transactions. C-store retailers need to determine if an upgrade to EMV-ready terminals is worth the cost.

    “Take a look at your chargeback rates. If the average ticket is less than $10, some retailers may make the decision not to upgrade,” said Hogan. “If you do not upgrade to EMV, I recommend you have end-to-end encryption and tokenization. These take a lot of risk out of the [equation] right away.”

    Heartland’s executive director added that although just 5 percent of U.S. credit and debit cards featured a chip at the end of 2014, these cards will become omnipresent this year. In fact, according to the Aite Group, 70 percent of U.S. credit cards and 41 percent of debit cards will be EMV enabled by the end of 2015.

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