Tax Tip of the Week | No. 317 | Changes You Need to Know About Credit Card Processing
Tax Tip of the Week | August 26, 2015 | No. 317 | Changes You Need to Know About Credit Card ProcessingIf you process credit card transactions, you need to know about EMV...
“EMV” is shorthand for Europay, MasterCard and Visa, three major players that joined forces to create protocols for global payment card acceptance. The EMV system works with point-of-sale terminal and ATM manufacturers and credit card processors to ensure that new cards embedded with electronic chips work worldwide. It is the only effective and efficient technology now in use that can prevent payment card fraud on a global scale.How are you affected?On Oct. 1, 2015, fraud liability shifts from issuers to merchants for counterfeit card fraud for merchants not using an EMV compliant device. (Fuel merchants have until Oct. 1, 2017).Studies show the fraud rate is higher in the U.S. than in other countries. In Europe credit card fraud has been reduced by 80% after migrating to EMV; compared to a 47% increase in the U.S. during the same time, but without the migration.Non-compliant merchants are subject to a liability shift for card-present counterfeit fraud transactions. If the merchant accepts a non-EMV card, has an EMV point-of-sale device and the transaction is fraudulent, the merchant has chargeback rights.If the merchant accepts an EMV card and does not have an EMV point-of-sale device, then the merchant does not have chargeback rights.Merchants that have EMV-capable terminals will need a download to enable EMV acceptance and possibly a peripheral device for contactless EMV card processing.A full-service payment processor, TransFirst can provide savings, choice and support for businesses that process Visa, MasterCard, Discover and American Express cards in person, by mail or phone, online or with a mobile device.You can contact us in Dayton at 937-436-3133 and in Xenia at 937-372-3504. Or visit our website.Rick Prewitt – the guy behind TTW...until next week.