Chargeback Bills Have Already Made Its Debut

There are lots of articles outlining the reasons why merchants should upgrade their payment systems to accept the EMV chip cards. And even though it has been reported that every merchant will be liable for counterfeit fraud, most small to medium-size merchants do not realize the scope of how much chargebacks can really rack up in dollars.

In 2014, credit and debit card fraud cost in the U.S. was $8.6 billion. The Strawhecker Group, a payment consulting firm that surveyed 3.5 million card-accepting merchants, realized that most merchants did not place a dollar figure on chargebacks which could total over tens-of-millions of dollars.

As time continues to roll by, more evidence is surfacing when analyzing the impact EMV chip cards have had in the market. According to Strawhecker, chargebacks for small to medium-size merchants rose 15% in the fourth quarter from last year. However, the survey only included a few weeks under the new EMV regulations; therefore, it is likely the cost has risen even more since then.

Mike Thurow, Vice President of store systems for Harps Foods stores, acknowledges a significant increase of counterfeit fraud. Not too long ago, a Harps grocery store had to pay $4,000 in counterfeit chargeback due to one woman who visited 10 grocery stores after finding out the counterfeit card worked. Needless to say, the Harps grocery stores is planning on upgrading the payment systems to chip card transactions.

Target, Home Depot, Walmart, and more now have EMV chip card payment processors. Other large merchants are on the track to becoming EMV compliant; however, there is a decent wait time to upgrade.

“Unfortunately, there are so many that have yet to make the switch, but we have told them and even preached that this is going to be the result when you don’t adopt EMV in time,” said Stuart Tyron to the Wall Street Journal. Tyron is a special agent of the criminal investigative division of the U.S. Secret Service which deals with payment-related crimes.

EMV migration has already lowered credit fraud by 72% in the U.K. and 50% in Canada. As the year goes by, there will be more numbers to paint a clearer picture for the United States. But if you study the current trends, it is safe to say, that not starting the process to upgrade to EMV could be a costly decision in the end.

If you are business looking to catch up with top merchants, protect your customers as well as your business, and want to avoid being held liable for counterfeit fraud, visit www.gilbarco.com/emv.

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