As many of you are aware, October 1, 2015 marked the launch of the “Payment Networks’ Liability Shift.” Under this new paradigm, retailers that have not implemented new EMV (Europay, Mastercard, and Visa) enabled point-of-sale equipment and banks that have not issued EMV payment cards, may be liable for credit card fraud. That shift is outlined in the following scenarios:
If a merchant (i.e., a hotel) is still using the “swipe and signature” system and the customer has an EMV enabled card, the merchant is liable for any counterfeit credit card fraud that may occur;
If the merchant has the new EMV enabled technology at their point of sale, but the bank has not issued to the consumer an EMV enabled card, the bank is liable for any fraud that may occur;
If the merchant uses the new EMV technology on a customer’s smartcard and fraud takes place, the credit card company bears the liability, as is the case today.
To help you navigate the transition, AH&LA recently hosted a webinar for members which is now available online. For more information on the important changes coming, watch this panel discussion featuring AH&LA's vice president of Government Affairs, Maryam Cope, hosted by the Electronics Transactions Association.
This is a tremendous technology shift for the merchant community and the hotel industry with an estimated 1 billion new credit cards needing reissue in the U.S. As reported by Bloomberg Business, by the end of the year only about 36 percent of Americans’ credit cards will have EMV chips based on estimates from Javelin Strategy and Research. By the end of 2017, that number should jump to 67 percent. On the merchant side, the investment in new Point of Sale systems, employee training, and transition to new processes to accommodate the new cards will be substantial.
AH&LA is closely following this technology transition and will continue to make sure we are at the table to raise the concerns and priorities of our members. We strongly welcome your feedback to ensure we are representing your concerns and encourage you to contact us at gov.affairs@ahla.com.
