Liability and EMV: The Need For Upgrades

Liability and EMV: The Need For Upgrades

Earlier this year, at least fifty people were reported to be victims of credit card fraud at a San Anselmo gas station in California. According to Marin Independent Journal, physical skimming devices were the culprits of this security breach and had to be removed from the pumps. Similar incidents are being investigated in adjacent counties.

A contributing factor to this rash of targeted skimming fraud is the slow adoption of EMV-compliant POS technology across the collective brick-and-mortar, transaction-based industry. defines skimmers as devices that mine data from your card in order for it to be sold and turned into cloned cards. Standard credit cards are especially vulnerable to this because the static information on the card’s magnetic stripes can be replicated over and over by counterfeiters.

On the other hand, EMV chip cards create a one-time transaction code that cannot be cloned. While this is not counterfeit-proof, this technology will stop many criminals in their tracks. EMV is short for Europay, MasterCard, and Visa, and is the new and improved standard for authenticating card transactions.

However, not all merchants are ready for this upgrade—and the pressure is mounting. Last year saw the shift of fraud liability to the party least compliant with EMV technology when cards were present. With more and more EMV cards in customer wallets, merchants are either scrambling to replace their POS technology or bracing themselves for the inevitable cost of fraud. It is a risky gamble, and one that many small businesses might not be able to weather.

In a twist, the adoption of this technology is most certainly the reason behind the fraud targeting California’s gas stations. ATMs and gas stations—like the one in San Anselmo—have until 2017 to make the shift to EMV-compliant technology. Until then, their trials serve as a warning to non-compliant merchants and banks of the kind of targeted fraud that could be coming their way.

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