New credit card chip ‘liability shift’ on Oct. 1

The silver chips on the credit cards above aim to stop fraud.

WYOMING, Mich. (WOOD) — By the start of October, retailers across the nation are supposed to have upgraded credit card terminals that can accept the new EMV chips being used in debit and credit cards.

The EMV — which stands for Europay, MasterCard Visa — cards are supposed to make transactions more secure.

“What it does is it creates a one-time code that allows you to use that card. So people that are going to try and duplicate the card, fraudulent the card, it can’t be done,” said Aaron VanderWall, the owner of Imperial Computer Solutions.

While the EMV chips won’t prevent data breaches like the now infamous ones at retailers like Target in 2013 and Home Depot in 2014, they will make card information lifted by hackers useless.

“If (credit card information is) stored in their systems like all the big retailers do and someone breaches that, that code is going to be absolutely useless to them. So if they try to use that again, it’s just going to be a card denied because it creates a unique code for every transaction — as opposed to before, where your card number was you card number that could be used anywhere anytime,” VanderWall said.

Credit card companies are pushing retailers to install the new terminals. What’s referred to as the ‘liability shift’ will take place on Oct. 1. After that date, retailers who don’t have new terminals compatible with the chips will be held liable if there is fraud at the register involving a EMV-chipped card. If both the retailer and the bank have updated technology, the liability falls on the bank.

Some retailers including Target and Walmart already have the new terminals in their stores. Their machines won’t allow a card with an EMV chip to be swiped — those cards must be inserted into the reader.

“I think it’s a good thing and it’s going to give people a lot more piece of mind,” VanderWall said. “It will be good for retailers, too, because then they know that they are accepting good things.”

Shoppers like Rachael Olson, who used her EMV-enabled card for the first time Tuesday at Target in Wyoming, say they hope retailers hop board with the technology on sooner rather than later.

“I feel like if my credit card company feels that it is important that I would like to be able to use it other places,” she said.

Gas stations will have until 2017 to get EMV card readers installed at pumps.

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