The transition to the EMV standard in the U.S. continues to be an ongoing process in which millions of credit and debit cards have been redistributed to consumers and new POS terminals capable of reading the new cards are being installed by merchants. As part of the transition, Visa and MasterCard instituted a “liability shift” that took effect on October 1, 2015, making merchants fully liable for any fraudulent purchase that takes place at a non-EMV certified terminal.
Merchants across all industries have faced challenges throughout EMV implementation due to delays in the manufacturing of EMV terminals and the certification process that is required to activate them. As a result, many merchants are facing a significant increase in chargebacks. Some larger chains have reported EMV-related chargebacks in excess of $1 million per week following the liability shift. Despite making the investment to comply with the October 1 deadline by installing the necessary equipment in their stores more than a year in advance of the liability shift, many merchants of all sizes have been unable to obtain the required certifications through no fault of their own.
While the EMV shift has been sold by EMVCo and the consortium of companies that comprise it as a step forward for credit and debit security, the EMV transition in the U.S. excludes a requirement for a personal identification number (PIN) with each transaction. The U.S. Federal Reserve has previously stated that PINs make transactions 700% more secure. The independent supermarket industry values security and believes that the use of a PIN, in conjunction with EMV chip technology, provides greater security for customers and merchants alike.