If your customer approaches you with a chip card and you swipe instead of dip the card into the reader (pictured to the left), you could find yourself on the hook for that charge.
The transition to EMV
This day and age, you’ve probably noticed that more people are paying with cards than cash. But now, they’re paying with a specific type of card — cards with a chip in them, also known as EMV cards.
The United States is phasing out magnetic-stripe cards and replacing them with EMV cards, because they’re more secure (aka harder to counterfeit).
Why would my business have to adapt?
These fancy secure chips would be useless if they weren’t used, right? To make sure businesses are updating their own technology, the US credit card networks rolled out an EMV Liability Shift on October 5, 2015.
This means: If a customer disputes a payment because they suspect their card is being used fraudulently (either they don’t recognize your business name or remember the charge), the card issuer will check to see if the customer’s card was run through the proper processing device. That’s the very first thing they do - before asking your business for more details.
If the bank sees that your customer’s EMV card was swiped (old credit card practice) instead of dipped (new practice pictured at the top), the bank may automatically assume that the payment was taken fraudulently and hold you liable for the charge. Yep! They may not even give you an opportunity to challenge the cardholder’s claim like you would in a non-EMV-related payment dispute.
Remember, this is a credit card network rule, regardless of the payment processor you use. Because we want to make sure you’re informed and covered, we have an option for you!
Order your Square Contactless and Chip Reader today!
Square’s Contactless and Chip Reader is our most powerful reader yet! It securely accepts EMV chip cards, as well as contactless payments like Apple Pay and Samsung Pay.
If you have additional questions, read more about the EMV Liability Shift and feel free to comment here with your thoughts. Have you noticed more customers coming in with chip cards? Are you swiping or mostly dipping cards these days?
