Card Not Present Fraud , Fraud Management & Cybercrime

EMV: Should Liability Shift Be Delayed?

'No Reason to Move the Date,' Says Vanderhoof of EMV Forum
EMV: Should Liability Shift Be Delayed?
Randy Vanderhoof, EMV Migration Forum

Will U.S. banking institutions and merchants make the shift to EMV in time for the fraud liability shift this October?

Although some merchants want to delay the shift by up to a year, Randy Vanderhoof of the EMV Migration Forum sees "no reason to move the date."

The major card brands' October liability shift date is an incentive, not a mandate. So, failing to implement EMV before the liability shift date won't result in fines or an inability to conduct transactions. It simply means that as of October, a card issuer or merchant that does not support EMV assumes liability for fraud that results from compromised magnetic-stripe card transactions.

Merchants, payment card-issuing institutions and financial fraud experts are hotly debating whether new chip-enabled, EMV-compliant payment cards and point-of-sale systems will be sufficiently in place by October (see: EMV: U.S. Won't Make October Deadline). The latest entrant is the Food Marketing Institute, which represents thousands of retail stores and pharmacies. This group recently sent a letter to Visa, MasterCard and other major card brands, asking them to push back the liability shift to 2016. "The reality is that the system will not be ready to meet the card networks' arbitrarily-set mandate for the liability shift in October 2015," wrote Leslie Sarasin, president of the trade group.

But Vanderhoof, executive director of the EMV Migration Forum, disagrees. "There really is no reason to move the date," he says in an exclusive interview with ISMG.

He does not dispute that some merchants will struggle to meet the deadline to upgrade point-of-sale systems from handling magnetic-stripe payment cards to those enabled for chip technology. "The merchants have a much more complex ecosystem that has to evolve," Vanderhoof says. "Many are struggling to update their point-of-sale and back-end systems to work in line with the changes that have to happen on the payments side."

But he believes these challenges will be overcome through cooperation and education among the affected parties. "We still have six months," he says. "A tremendous amount of work can be done in that time frame. I think we are still on track."

In this interview about the U.S. migration to EMV-compliant payment cards, Vanderhoof discusses:

  • Why he believes merchants and card-issuing institutions will meet the October deadline;
  • The new EMV Minimum Requirements Matrix, which outlines the baseline for chip deployment;
  • Education efforts specifically aimed at helping smaller merchants prepare for the liability shift.

Vanderhoof is also the executive director of the Smart Card Alliance, a not-for-profit, multi-industry association of more than 180 member firms working to accelerate the widespread acceptance of smart card technology in North America and Latin America. He has directed the transformation of the organization from primarily a networking organization into a diverse, education-oriented, international group that helps stimulate the adoption of all forms of smart cards for electronic payments and digital security applications.

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