Surveys in the US suggest many businesses may have missed a deadline for installing a new payment system for customers – meaning they may be liable for credit card fraud.
Credit card companies gave banks and retailers until October 1 to use European-style cards with chips rather than the traditional magnetic stripes.
“More and more merchants are going to start enabling their terminals to read the chip on your card to help prevent fraud, specifically counterfeit fraud which is about two-thirds of the fraud we see in stores today. Chip technology is specifically used to address counterfeit fraud,” said Stephanie Ericksen, Vice-President of Risk Products with Visa.
As before, fraud victims can be reimbursed but banks can now go after retailers who have failed to install the new equipment.
Reports say there has been criticism that most new chip cards in the US will still only require a signature rather than a four-digit pin – and that the technology does nothing to counter online fraud, and may even encourage more.