The EMV Migration Forum released a new document, “Understanding the 2015 U.S. Fraud Liability Shifts,” to provide information to assist merchants, acquirers, processors and others implementing EMV chip technology in the U.S. to better understand liability shifts. View the document
Today, for most counterfeit card fraud that occurs at retailers’ in-store locations, liability is with the card issuers. Beginning in October 2015, that liability will shift to the merchants in certain cases unless they have replaced or upgraded their card acceptance and processing systems to use chip-enabled devices and applications to process payment transactions. With October fast approaching, many card issuers, merchants and processors implementing EMV chip technology are asking, “Who is liable for what and when under these fraud liability shifts?”
“What the fraud liability shifts mean is often unclear to payments stakeholders that are just beginning to learn about or migrate to EMV chip technology. As October gets closer, it’s crucial that stakeholders understand what the shifts are, what their responsibilities will be, and what this means for their business,” said Randy Vanderhoof, director of the EMV Migration Forum. “This document simplifies essential information surrounding the liability shifts to help stakeholders meet these dates and to streamline the migration to chip technology.”
The following liability shifts and payment networks are addressed in the document:
- Counterfeit Fraud LiabilityShift. Applies to the following payment networks: Accel, American Express, China UnionPay, Discover, MasterCard, NYCE Payments Network, SHAZAM Network, STAR Network and Visa
- Lost or Stolen Fraud Liability Shift. Applies to the following payment networks: American Express, Discover and MasterCard
- Liability Shifts for Cross-Border Transactions. Applies to all global payment networks
The document highlights the fact that, as a generality, the party supporting the most secure technology for each fraud type will prevail in a chargeback; and in case of a technology tie, the fraud liability as of October 2015 generally is expected to remain as it is today – with the issuer.
The document covers common scenarios and only those payment networks that provided information to the EMV Migration Forum in the preparation of this document. There are other scenarios that could affect liability that are not covered in this document, and other networks that may have liability shifts but did not provide information. Merchants, acquirers, processors and others implementing EMV chip technology in the U.S. are therefore strongly encouraged to consult with their respective payment networks regarding applicable liability shifts and rules.
For additional, high-level information on the liability shifts for merchants and issuers, visit GoChipCard.com. GoChipCard.com was created by the EMV Migration Forum and the Payments Security Task Force to provide easy-to-use and simple resources about EMV chip technology for U.S. consumers, merchants, and issuers.
About U.S. EMV Chip Migration
Commonly used globally in place of magnetic stripe, EMV chip technology helps to reduce card fraud in a face-to-face card-present environment; provides global interoperability; and enables safer transactions across contact and contactless channels. Chip implementation was initiated in the U.S. market in 2011 and 2012 when American Express, Discover, MasterCard and Visa announced their roadmaps for supporting a chip-based payments infrastructure. Acquirer processor readiness mandates to support EMV were established for 2013, with liability shifts for managing fraud risk in a face-to-face environment set for 2015.
About the EMV Migration Forum
The EMV Migration Forum is a cross-industry body focused on supporting the EMV chip implementation steps required for payment networks, issuers, processors, merchants, and consumers to help ensure a successful introduction of more secure chip technology in the United States. The focus of the Forum is to address topics that require some level of industry cooperation and/or coordination to migrate successfully to chip technology in the United States. For more information on the EMV Migration Forum, please visit .