Patrons may have noticed something different about that new credit or debit card: the rectangular metallic design above the number on the left side.
It’s a computer chip that’s going to make card transactions a lot more secure than the magnetic stripe everyone is used to.
Named the EMV system, it doesn’t really affect the consumer. But it has one serious implication for merchants who rely on credit card transactions. Those business operators who don’t make the switch to EMV are going to find if they take a bad card, they could be on the hook for the loss instead of the bank or card company.
Although banks and card companies say they’ve been working to get the word out to their customers, a lot of small business operators say they aren’t really aware of the changes and the need to get a chip-enabled credit card machine.
And those changes — including shifting the liability for a bad transaction to the merchant — happen Oct. 1.
A representative of Carson Jewelry and Loan said he wasn’t aware of that change but would ask his corporate bosses about it.
The operators of Nevada Vapor Supply down the street said they are aware even though they don’t remember getting any notifications from their bank or card company.
“If you don’t have the (chip reader) that money’s gone,” said Chad McIntosh.
He said they plan to make the switch.
EMV is far from new. Europe and Great Britain have been using it for several years.
Vera Treat of Hanifins Art and Antiques said in Europe, businesses won’t take magnetic stripe cards anymore.
“We’ve already got the new machine,” she said. “We’ve been using them for a while.”
Likewise, Doug Cramer at Mom & Pop’s Diner already has the new machines — both at the diner and at the Caucus Deli he manages in the Legislature building.
Managers at Firkin & Fox down the street also are planning to switch.
The conversion also applies to government agencies who take credit and debit cards. Carson City Treasurer’s Office said it won’t hit them since they don’t take credit cards at the counter.
The Secretary of State’s office and DMV, however, process millions of credit card transactions a year and are expected to convert to EMV.
The EMV chip cards are much more secure because the computer chip talks to the bank when inserted in the machine to make sure the card is authentic and generates a unique transaction code that can never be used again. So even if a crook was able to read that code, it wouldn’t work a second time.
In contrast, there are numerous devices out there now capable of reading and stealing the information from a magnetic stripe card — then making a counterfeit card.
Beth Kitchener of Mastercard said if fraud happens when a merchant doesn’t upgrade even though the bank is on the system, the merchant is responsible for the loss.
In other situations, the bank can be held accountable but Kitchener said cardholders are never held financially responsible when fraud occurs.
If your card doesn’t have the chip, it’s still usable since EMV readers, at least for now, also take magnetic stripe cards.
Debra Rossi of Wells Fargo Merchant Services said the process is fairly simple and in most cases, the bank ships the new reader directly to the merchant.
“Usually it’s as easy as plugging in the power and network cables and running a test transaction,” she said.
She said there are several options for business owners including renting, leasing or buying the new machines. Cramer said options he offered included per month flat rates, a percentage charge based on the volume of business and per transaction charges. He said the overall rates were similar to what he was paying on the old system.
Although it’s touted as cyber-secure, Cramer said he doubts that will last forever because the crooks will find a way around it.
“Nothing is hack-proof,” he said. “If your car is not hack-proof, these cards are not hack-proof.”
But for now, it’s the global standard and, as of Oct. 1, that includes in the U.S.