EMV liability in flux

The presence of chip cards is making some merchants behave in ways worth watching

Certainly legislators did their best to clearly outline the liability shift they envisioned as EMV cards came online in the United States last October. But some kinks in the system are still being worked out, according to reports from the field.

“We converted our debit card program to all EMV cards last summer,” says CUES member Scott Duszynski, president/CEO of Keys Federal Credit Union, Key West, Fla. “Recently we discovered that some vendors that have their terminals activated allow the EMV cards to be swiped with no notice to the member. By allowing this, the merchant just shifted the liability back to us. Most merchants have the terminals set to tell the cardholder to insert the card in the chip reader. Some, including Walgreens, do not.

“We brought this up with our card processor and they suggested we ‘decline’ transactions when the member swipes our EMV card, but that is sure to upset our members.”

“It is a problem,” says Michelle Thornton, director of product development at CUES Supplier member CO-OP Financial Services, Rancho Cucamonga, Calif. There are situations where liability should shift to the merchant, but doesn’t, because of accidental or deliberate POS processes.

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