IBC News & Events

While most insurance agencies do not take credit cards, many of your customers do...they could be impacted by the new requirements for credit and debit card readers. The nationwide switch from magnetic strip credit cards to EMV chip cards has been well underway this year focused on the October 1^st deadline. Businesses who accept credit and debit cards that don't have the new card readers with the secure chip technology may find themselves holding the bag for card fraud! If you don't swap your swipe-and-sign card reader out for an EMV card reader by Oct. 1, 2015, the so-called "liability shift" deadline, your business could have to eat the potential costs and chargebacks associated with fraudulent transactions, not your payments processor. The cost for mobile solutions can run as low as $35, but it can run as much as $1,500 for a new in store system. Right now, if a business processes a fraudulent card, the card issuer absorbs the cost, whether it is Bank of America, Chase, Capital One, etc. After the "liability shift" hits, if someone pays with a fraudulent chip card and the business hasn't upgraded to an EMV reader, the liability falls on the business not the card issuer. For example, if a person purchases $1,000 worth of appliances from the store with a counterfeit EMV chip card and the appliance store doesn't have an EMV chip card reader to run the transaction, only the old magnetic swipe-and-sign system, the store will be responsible for the $1,000.

Oh...bad news for the client...this is an uninsured loss and we are not aware of any markets for coverage. If you have clients who do a lot of credit card business and fraud is an issue they need to invest in new card readers that can read EMV chips.