How to Combat EMV Chargebacks

•  Now that the EMV liability shift has passed, many merchants who still have not adopted EMV technology have complained about experiencing an increase of chargebacks for their business.

•  The reason for these significant increases of chargebacks is still not fully clear.

How to Combat EMV Chargebacks

•  One network reported that out of 250,000 merchants, there was an increase of card-present chargebacks by 50%.

•  Some experts believe consumers are abusing the chargeback system, while credit card companies feel this increase is common and comparable to what other countries experienced with the emergence of EMV.

How to Combat EMV Chargebacks

•  Because of this increase, some merchants have begun to sue issuers and networks, declaring they did not have enough time to integrate EMV solutions nor were they cautioned of the costly fines involved.

How to Combat EMV Chargebacks

•  Larger merchants especially do not want to have to go through the lengthy process of training customers how to use their chip cards at their upgraded terminals.

•  On a similar note, switching to EMV-capable terminals is a large and expensive project that even larger merchants do not want to hassle with.

Why the Delay?

•  On the other hand, card companies maintain the stance that merchants have had five years to make the switch to EMV capable products and should have complied by the liability shift.

Why the Delay?

•  However, some merchants who met the liability shift and upgraded their terminals are continuing to face delays from processors that are still not EMV-ready.

•  This delay of EMV software could be caused by stricter EMV installation guidelines recently issued by VISA and also in part due to a lack of technical expertise from the merchant.

Why the Delay?

•  As the payments industry continues to sort out the EMV issues, merchants can avoid the possibility of chargebacks by understanding the regulations of EMV.

Why the Delay?

•  Here are some key facts merchants should recognize:

–  Merchants should not be held accountable for chargebacks that occur on valid, non-fraudulent cards not containing a chip.

–  Merchants who lack EMV-capable terminals are now at a higher risk for instances of fraud, as criminals are avoiding merchants that have EMV, as these terminals are harder to compromise due to heightened security features.

–  Merchants are held liable once a card is swiped. If there is a dispute or fraud involved, the merchant will be held responsible for losses, not the bank.

Key Facts about Chargebacks

•  The most efficient way to avoid EMV chargebacks can be done by processing transactions correctly. Be sure to follow these rules:

–  Always swipe non-chip cards and never manually enter in account numbers.

–  If you have to manually enter in card numbers, use the security code, notice the expiration date, and take an imprint if possible.

–  Do not key or swipe in a chip card. This offers zero protection.–  Process chip cards correctly by inserting them inside the

terminal.–  Do not override or swipe a declined chip card. Instead, ask for a

different form of payment.

How to Avoid Chargebacks

•  Although chargebacks have been an issue within the payments industry for decades, the start of EMV technology has increased this problem for merchants.

•  Thankfully, merchants can lessen their chances of experiencing a chargeback by adopting EMV technology solutions and following the regulations to process a proper transaction.

How to Combat EMV Chargebacks

Did you miss the EMV liability shift date?Contact First American Payment Systems and get started with EMV

today!