Magazine article American Banker

A Scurry to Upgrade before Visa Liability Shift

Magazine article American Banker

A Scurry to Upgrade before Visa Liability Shift

Article excerpt

Byline: Kate Fitzgerald

Smaller merchants may miss Visa Inc.'s first deadline for chip card acceptance by as much as two years, but larger merchants should meet the deadline easily.

Merchants that accept 75% of Visa transactions annually through chip-enabled terminals as of October 2012 will not have to validate their compliance against the Payment Card Industry data security standard, Visa said Aug. 9. They will still be required to adhere to the standard.

Visa says it hopes to accelerate U.S. migration to EMV integrated circuit card specifications to support more secure payments worldwide and prepare the U.S. marketplace for the arrival of near field communication-based mobile payment technology.

The nation's largest merchants are "mostly poised" to upgrade and replace terminals to accept contact and contactless EMV cards at the point of sale, says Randy Vanderhoof, executive director of Smart Card Alliance of Princeton Junction, N.J.

"It won't be a big deal for large merchants by next year to ensure that most of their terminals can accept [contact and] contactless payment because the majority are already equipped for it or are moving in that direction," Vanderhoof says. "But smaller merchants more likely will wait to upgrade to contactless until the time they would ordinarily replace terminals."

By October 2015, merchant acquirers could be liable for fraudulent transactions on chip cards if merchants do not have the proper readers in place, Visa said. Currently, issuers are liable. Fuel-selling merchants won't be affected by a liability shift until October 2017. …

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