The Oct 2015 payments "Liability Shift". What it means for merchants

October 15, 2014
min read

On October 2015, exactly one year from now, the deadline for implementing Chip & PIN will come. This deadline had been called the "Liability Shift" by popular media sources.

Should you miss this deadline for the “Liability Shift” and continue to use payment systems without EMV technology, you are at risk of severe consequences should fraud occur. By next year, the liability for the costs associated with credit card fraud will fall on the entity using out of date technology. According to, this liability is estimated to total more than $10 billion.

So what does this mean for merchants post liability shift?

If a merchant is still using “swipe” technology and a customer is using a Chip & PIN (up-to-date) card, then that merchant will be liable for any fraud that may have affected their customer.

If the merchant is using Chip & PIN technology, but the customer does not have a new card yet, then the issuing bank will be liable.

Yes, it’s still far enough away for a merchant to update their technology to remove liability and it seems like plenty of time at a micro-level. But...In the grand scheme of things things could get complicated for providers and merchants alike as every company that accepts payments with a terminal; retailers, service providers, consultants, salons, restaurants, hotels, ski resorts, grocery stores, personal trainers, travel agents, food trucks...etc. must also all update their technology.

For example, as larger retailers will need to update their thousands of stores across the country, acquiring banks could spend most of their resources on these migrations, which could create a backlog for other merchants who need to switch over.

Early adoption of new technology is the ultimate way to avoid being stuck on the “liability shift” waitlist. Prepare for it today.If customers all decide to start using EMV and grow aware of this issue, it’s possible they might have a negative connotation towards businesses that don’t use EMV Chip & PIN technology.

This may be true if you are in a city that has high volumes of international visitors – foreign visitors are well aware of the technology. For example, EMV has been widely adopted elsewhere in the world. It’s significantly reduced credit card fraud. France claims to have seen an 80% reduction in fraud since implementation.

Avoid this by being proactive and working with a company who will help you migrate to EMV Technology.

Should you have many terminals, integrations or special needs. Consider working with a team of experts to help you create and execute a plan to upgrade your technology. A plan will help you think about everything you need to transition and will make it seamless. Consider your approach, scheduling deployment, and customer education. Often times a phased approach when making a switch is the optimal way to change.Although the shift might seem like a big change, it shouldn’t impact your business negatively at all. Give us a call – we will find you the best provider that fits your unique business needs.