Knowledge and Insights
If your nonprofit organization receives reimbursement for services through credit card payments, you need to understand how these changes will impact you.
U.S. credit card companies are making the transition from magnetic stripe technology to cards with chips. Chip cards are payment cards that have an embedded chip, offering increased security when your customers or clients use them to make payments to your organization. Chip cards are based on a global card payment standard called EMV, which stands for Europay, MasterCard and Visa, currently used in more than 80 countries around the world. The United States is now in the process of making the migration to EMV technology.
In an effort to reduce fraud, EMV chips are becoming the standard for integrated circuit cards (IC cards), IC card capable point-of-sale terminals and automated teller machines. Chip card transactions offer advanced security for in-office payments by making every transaction unique. Chip cards are also much harder to counterfeit or copy. If the card data and one-time card are stolen, the information cannot be used to create counterfeit cards and commit fraud.
For organizations and financial institutions, the switch to EMV means adding new in-office technology and internal processing systems. To get chip-enabled for your organization, contact your acquirer or payment services provider.The switch to EMV also means a change in liability for credit card fraud. Previously, if a transaction was conducted using a counterfeit, stolen or otherwise compromised card, consumer losses from that transaction generally fell back on the payment processor or issuing bank, depending on the card’s terms and conditions.
However, as of October 1, 2015, a deadline set by major U.S. credit card issuers, including MasterCard, Visa, Discover and American Express, the liability for card-present fraud will shift to whichever party is the least EMV-compliant in certain fraudulent transactions. In other words, if you have not changed to the new chip compliant system, you could be on the hook in case of a fraudulent charge.
If you would like to learn more about this issue and how to protect your nonprofit organization, please feel free to contact me at firstname.lastname@example.org or 609-689-9700.