Merchants unaware of Chip Card Requirements by Visa and Mastercard, a big issue for liability if not addressed. Merchant loses chargeback rights
With turnaround being rapid in the merchant processing world of sales, we know that customer service is lacking. This doesn’t only affect merchants waiting on long hold times for customer service through their processor, but it means that they are uneducated about major changes going on in the credit card processing industry. The biggest change impacting merchants is happening this year. It requires a complete terminal replacement because credit card processing is going to be done differently. Currently in Europe, all merchants use a chip/EMV credit card processing solution; thus not using the swiper on a credit card for transactions. What does this mean? Well, it means that merchants have more secure transactions; due to chip cards assigning a random code to each transaction. This random code in the chip card technology (EMV chip cards) allows for merchants to be able to have less of a risk of a data breach of credit card numbers and personal data. This is a requirement by Visa and Mastercard, and yet most merchants do not have a clue. Merchant loses chargeback rights if this isn’t handled
The purpose of this blog post is to educate merchants on this change and give them the options they need, and knowledge to reduce liability by the October 2015 deadline. Why is this important? Well, if you do not have a credit card processing machine that is working through the chip system by October 2015, you will be liable for your chargebacks. An example is if a merchant sells a wedding ring to a customer and the customer has the merchant swipe the credit card transaction rather then EMV chip card run the transaction, the transaction is 100% liable to the merchant, regardless of proof due to not having a chip-card reader. If the ring was $20,000 and a customer swipes there credit card (Visa and Mastercard), this transaction could 100% be disputed, and in addition, will give the customer 100% chargeback rights and allow the customer to even keep the ring. This is a terrible and horrible risk that is not necessary, and can be avoided by getting a new credit card machine, such as a $150.00 ICT220 by Ingenico. We must make sure all merchants know this so that they can avoid being scammed by customers who know this, and Merchant loses chargeback rights
I’d like to see every merchant have this machine before October 2015, so we can make sure transactions are not liable on the merchant’s side because they were not aware. This will be a costly mistake for merchants who aren’t educated, and we must change this immediately. If we do not promote this and educate all merchants, whether they are processing with our credit card processing company or not, we will see a huge issue with chargebacks and fraud. We want to avoid Merchant loses chargeback rights.