It has been more than a year since U.S. credit and debit cards started coming with a security chips, but there is still confusion and inconsistency with the system. The EMV chips are supposed to be more secure than the traditional magnetic strip when it comes to having your personal information stolen.
The transition is not required by law, but the agreement between card issuers and merchants has to do with fraud liability. Starting October 1st, 2015 the liability for fraud shifted from card issuers to merchants, in some cases. If you have a chip card, but the merchant does not have a chip reader as a payment option, the merchant is now liable if a fraudulent card is used. If you do not have a chip card, the issuer is still liable. The liability goes to whichever side is using the less secure option.Â
According to Visa, nearly 1.5 million retailers are using the new technology, which is an increase of 385 percent from last year.Â
Meanwhile, ATMs are still in the process of shifting liability. MasterCard ATMs shifted liability on October 1, 2016 and Visa ATMs and fuel pumps will shift October 1, 2017.
For more information on the liability shift whether you're an issuer, merchant, processor or consumer, click here. If you have not received a chip card, we recommend you contact your financial institution.
