Most major credit card companies have begun releasing Credit|Debit cards (Cards) with an embedded “chip”. This chip cannot be easily replicated and provides much greater security than the magnetic stripe used on Cards for the past decades. This chip technology is referred to as EMV. In addition to new Cards, adoption of EMV pushes merchants (like you) use sophisticated new Card readers.

On October 1, 2015, in-store counterfeit fraud liability will shift to the party—either the issuing financial institution or the merchant—that has not adopted chip technology. Understanding how this liability shift affects your business can help protect you from liability exposure.

Here are the new rules as defined by Visa:

• When a chip card is used at a traditional magnetic stripe-only terminal. If the purchase is a counterfeit transaction, the merchant generally holds liability, because the issuer has made the investment in chip technology to make transactions more secure while the merchant did not invest in upgrading to chip.
• When a chip card is used at a chip-enabled terminal that has been activated by the merchant. If the purchase is a counterfeit transaction, the merchant is not liable, and the issuer will continue to bear the responsibility of counterfeit fraudulent activity.

The following scenarios remain subject to existing liability and chargeback rules.

• A traditional magnetic stripe card is swiped by the customer at a magnetic stripe terminal. If the purchase is a counterfeit transaction, the merchant is generally not liable, just like today.
• Card-Not-Present transactions (phone orders or transactions run from the card stored in Cyrious).
• Lost and Stolen fraud.

When looking at all Cyrious customers processing on CapitalQ, more than 88% of Card charges run are Card-Not-Present, so there is no change for these transactions. Of the remaining 12%, a liability shift will occur only if a chip-enabled card was presented AND it was a counterfeit card. This does NOT apply to chargebacks due to disputes over the order. We realize not all Cyrious customers have the same transaction breakdown. Contact Capital Q for your specific breakdown.

Cyrious and Capital Q are committed to bringing you an EMV enabled solution. Cyrious has been waiting on the release of integration software from the credit card processor that will allow Cyrious to work with EMV terminals. The release of this software has been delayed from early-2015 to mid-2015 to some point in the future. Cyrious did obtain a preliminary draft in August, but it is not close to a working solution at this time.

Cyrious and Capital Q are investigating other options to serve you, but these options will not be available come October 1st. We do not have an anticipated date for EMV support within the Cyrious Software, but will keep you apprised of our progress in this area.

If you’d like to have an EMV enabled device, CapitalQ has invested in terminal hardware to provide Cyrious customers a short term EMV rental terminal. To order a rental terminal go to http://www.capitalq.com/getEMVcyrious or call CapitalQ at 800-887-6227.