The EMV fraud liability shift created many debates during ETA Transact 2015, held in San Francisco a couple of weeks ago. As of October 2015, the liability of any fraud losses will be passed from issuer to retailer, so the latter has to ensure the new EMV technology is in place and they are no longer relying on magnetic stripe card technology. However, issuers are still not issuing secure cards with a pin, as they don’t want to spend the money. Merchants are getting a negative ROI due to all the changes and expenses they are incurring to become EMV compliant.
During ETA Transact 15 Expo, merchants and financial institutions manifested a strong focus to initiate a fast change, looking for new solutions to solve this challenge, such as tablet-based point of sale technology.
EMV – to shift or not to shift?
But, let’s be clear about this! Migrating to EMV is not a small task and merchants have become really frustrated by the huge expense, time and effort they have to invest in the switching process. Big merchants such as Wal-Mart started their EMV-switch process more than five years ago, while the small and medium size merchants have found themselves lacking knowledge, time and funds to make the switch in time.
EMV is a massive initiative that brings merchants the opportunity to take more fraud out of the system, but will add nothing to the customer experience, and has no effect on shopping volume as consumers are not influenced to shop more. Moreover, consumers’ payment experience will be adversely affected and, while everyone is focused on the merchant and the issuing bank shifting process, the customer is left out of the equation. So the main question that arises here is; who is going to educate the consumers in order to familiarize themselves with a totally new payment experience?
EMV – threat or opportunity?
As mentioned during ETA Transact 2015, cybercrime has become the most profitable criminal activity in the world. From a consumer perspective, “the shift to EMV is good news as it will make it harder for cybercriminals to counterfeit credit cards and conduct fraudulent purchases in stores. But from an online merchant perspective, as it becomes more difficult for cybercriminals to monetize on counterfeit cards their goals will shift towards the use of stolen credit card data through online channels”, said Alisdair Faulkner, CPO, ThreatMetrix.
The benefit brought by the EMV shift stays in putting greater barriers against cybercriminals and fraudulent purchases in stores. But, following the adoption of EMV, the level of online fraud and data breaches is predicted to increase in the U.S., due to a goal reorientation of the cybercriminals who will become keener to use stolen credit card data on ecommerce merchants’ portals. Therefore, online merchants have to prepare and create systems to fight an even higher level of online fraud.
Read the highlights from ETA Transact 2015 on mobile payments and on the advice for merchants who want to expand globally – ETA Transact 2015