After the “liability shift” hits, if someone pays with a fraudulent chip card and you haven’t upgraded to an EMV reader yet, the liability falls on you. Right now, if you process a fraudulent card, the card issuer absorbs the cost, whether it be Bank of America, Chase, Capital One, etc. “It’s named as such because it denotes a change regarding who pays when certain bad thing happen,” Dunn says. “Liability shift” is the term banks and payment processors are calling the Oct. Chip cards also do not offer any additional protection against e-commerce (online purchase) fraud, as cardholders’ names, card numbers and card expiration dates are printed on them, just as they are on magnetic stripe-only cards. While EMV chip technology is widely viewed as virtually impossible to counterfeit, some security experts claim it leaves cardholder data vulnerable when inserted into readers, when collected into merchants' information systems and when dispatched to payment processors, reports Reuters.
Related: 4 Reasons Merchants Should Make the Switch to EMV Now “It’s not that hard, unfortunately, to clone a magnetic stripe card, so this means bad guys who try to earn a nefarious living by skimming magnetic card numbers and recreating magnetic stripe cards can’t do that when the world migrates to EMV chip cards.”
“It’s quite difficult to clone the chip,” says Eric Dunn, senior vice president of payments and commerce solutions at Intuit.