Unless you spent 2014 under a rock, you already know that, this coming October, all merchants will be required to comply with new Europay, Mastercard and Visa (EMV) standards. While Europe (and, well, the rest of the world) has been on this standard for decades, the U.S. has managed to limp by with our magnetic stripe cards for a long time, partially because our fraud detection and resolution systems are strong, and partially because we’re addicted to an aging payments infrastructure.
The good news is that the switch to chip-and-PIN (or chip-and-signature) cards will go a long way toward preventing the kind of fraud that has marred the U.S. retail landscape for years. EMV cards feature an extra layer of security via an integrated chip inside the card that is more secure than the magnetic stripe that is common on today's cards and is much harder to duplicate and use fraudulently. They will make it far more difficult for criminals to steal card numbers and personally identifying information at the point of sale. The transition will also make life much easier for Americans traveling abroad and for merchants looking to conduct international business.
But the bad news is that most merchants will have to invest in a new POS system in order to accept these more secure cards. If they don’t, they’ll be liable for any fraud that happens at their stores. This could have disastrous consequences for many businesses.
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