Merchant services

Know Your Responsibilities When Accepting Non-EMV Credit Cards.

describe the imageAs A Merchant, What Are My Responsibilities?

The recent liability shift from credit card companies to merchants, that came with the transition to new EMV or “chip and pin” cards, has had an impact on every merchant’s POS practices within the merchant services industry. A merchant’s liability for fraudulent transactions is no longer the same as it was before the shift. Prior to the liability switch, all customers paid with “swipe and sign” magnetic strip credit cards. As a merchant, being aware of your responsibilities when accepting credit card transactions will help you to avoid being held responsible for fraudulent purchases under these new terms.

Download "The new wave of payment technology: The rise of smart terminals" to  learn more about the credit card machines of the future!


Am I Still Liable If The Customer Claims They Forgot Their Pin?

The first thing to be aware of is if you, the merchant, now accept a “chip and pin” card without capturing the customer’s pin, you will be held liable if that purchase turns out to be fraudulent. The liability lies solely on your secure transaction practices.

This applies even if your business has not yet installed EMV-enabled POS terminals. You will also be held liable for fraudulent purchases made with “chip and pin” equipped cards because you will be unable to capture your customers’ pins. This is an important facet of your business. You not only need to protect your business from chargebacks, but also protect your customers card information, make sure that you have done your due diligence in processing credit card transactions.

What If A Customer Wants To Pay With A Non-Chip Card?

Even after you have invested the time and resources installing EMV-equipped payment terminals, you may still have customers that want to pay with a magnetic strip card that is not equipped with EMV technology. Many cardholders are still being transitioned to EMV cards. The transition is expected to have been completed by the end of 2012. As long as you have a payment terminal that accommodates EMV technology and the card issuer does not pay with a “chip and pin” card, you will not be liable if that purchase is fraudulent. In other words, the liability falls on the card issuer for not distributing a chip and pin card.

This does not mean you are exempt from secure credit card transaction processess. When accepting magnetic stripe cards, your staff must still capture cardholder signatures and verify them, visually inspect the cards to determine whether they are genuine and take all the required steps to ensure that the card is authentic, and that the individual paying with the card is the rightful owner.This is also relevant to the many Canadian businesses that regularly serve American customers. Remember, so far there has been no credit card liability shift for U.S. customers. Their magnetic strip cards can continue to be processed the same way they were before the Canadian liability shift.

Be aware of your credit card transaction processes. Ensure your payment terminals are EMV certified and PCI compliant, and follow safe practices when processing credit card transactions with non-chip credit cards.


Text Size

Emily Moore

With seven years of experience in the industry, Emily is the Merchant Boarding and Underwriting Specialist for BNA Smart Payment Systems. She also has experience in credit risk management, fraud and chargeback analysis, and in-depth knowledge of chargeback mitigation. At BNA, she is responsible for reviewing, investigating, and resolving irregular transactions; identifying and analyzing trends; exchanging knowledge of trends with peers and supervisors; and keeping records of past fraudulent activities. With a solid understanding of current fraud trends and software applications, Emily has a methodical approach to problem solving, great attention to detail, and the ability to recognize patterns. As a fitness enthusiast, Emily enjoys CrossFit and playing sports to keep active. She also loves the outdoors and spending time up north.

Find Emily Moore on:

Subscribe to our blog