Chamber Insider Blog

Credit Card Fraud Technology That We Need to Know About


Thanks to Nick Sales, from Chamber member ETS Corporation for writing a quick blog post educating us on new credit card prevention technology that we should all be aware of!

You may have recently received a new credit card in the mail with a “chip” visibly embedded inside.  Here’s the reason why.  This chip technology is intended to reduce card fraud in the U.S. and add a new layer of security for consumers.  Seems simple, right?  Well here’s a deeper look into what’s really inspiring card issuers and merchants to prepare for EMV processing.

EMV (Europay MasterCard Visa) refers to chip-card technology which was adopted in Europe more than twenty years ago.  The credit card is dipped into an EMV enabled terminal, the chip is read, transaction is approved, and the customer signs the receipt.  Eliminating the swipe provides a more secure transaction since the magnetic stripe can be easily duplicated by thieves.  Merchants will be required to accept these chip cards by October 1st 2015 and in most cases will need to update their card readers and terminals.

However, the greater driving force for merchants to upgrade to chip-card equipment is to eliminate their liability for chargebacks.  Currently the card issuers take the hit for any fraudulent transactions.  Once the requirement takes effect later this year, non-compliant merchants will automatically become liable for any chargebacks.  This is how the Card Associations are forcing the hands of merchants to comply to this new U.S. standard.

Merchants and card issuers in the U.S. are estimated to pay billions in upgraded equipment and credit cards.  The U.S. is finally catching up with the rest of the world in accepting EMV.  But ultimately businesses that haven’t had issues with chargebacks in the past will likely not have issues with chargebacks after the October deadline either.  The shift to EMV processing is not a law, so some merchant s may choose not to update their equipment if chargebacks aren’t a huge concern.  I would pose the question – is it worth taking the risk?


For more information regarding EMV technology and merchant processing solutions email or call Nick Sales at 703.421.9101 ext 241.