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Written by President of MCPS, Art Leiberman
Learn all about EMVs
|Announcement: MCPS for Campgrounds and MCPS of Central PA are pleased to announce that they have added
two members to our staff, both as Regional Managers. Jess Trego, will be handling several regions in the US for our
Campground Division, while Michael Agrippin, will become Director of Lycoming County, which includes Williamsport, PA.
We have written extensively about the efforts of Visa and MasterCard to implement the chip card method of
processing, into the United States. For those who have missed all that has taken place, here is a very brief
In 2012, Visa and MasterCard were determined to install a new credit card technology into the US, which had
worked successfully in Europe. Called “Europay Visa MasterCard”, the new technology imbedded computer
chips in new credit and debit cards. The object was to eliminate the magnetic strip on these cards, which could
be easily read by counterfeiters. The plan was also to eliminate signatures from the process, and substitute PIN
transactions. The reasoning was based on the fact that, in the US, theft of credit cards had accounted for $800
BILLION in yearly losses to the economy.
Several factors were obviously involved in the process of that. Card-issuing banks would have to distribute
new credit and debit cards to consumers. New terminals, capable of reading the new chip cards, would have to
be sold to merchants in the US. Finally, it was determined that after the complete roll-out of the new system,
responsibility for fraudulent transactions at point of sale would rest with merchants.
An “announcement” was made to all of those involved in 2014, and a “deadline” for the completion of the final
installation of the system was set at October 1st, 2015. They might as well have made the deadline October
31st, Halloween, since the entire launch program was a horror.
The launch was nearly a complete failure. Only 22% of the cards were distributed by banks. Only 31% of
merchants had purchased the EMV-ready terminals, and very few processors had prepared the encryption for
the new credit card terminals to function properly. For restaurants, many terminals would not work with tip
programs. Some merchants found that their terminals would not properly read the chip cards, so they had to
use the magnetic strips anyway. There were a variety of problems with the whole system until, finally, a group of
merchants ended up suing Visa and MasterCard for the entire rollout. It was estimated that the EMV liability
shift was costing retailors money in chargebacks. From October 2015 to October 2016, it is estimated that the
rollout cost retailers $5.8 billion dollars in chargebacks.
In January 2016, the card companies announced a new target date for the rollout as sometime in 2017. As the
year progressed and pressure was taken off banks, the rollout, however, slowed down. Although it does
appear that most credit cards will carry the chips by 2017, debit cards are not faring too well.
So now the deadline has been moved once again, and the card companies seem to insist that this is the REAL
deadline for the total installation of the EMV system. From that date, all new credit and debit cards will ONLY
contain the chips, and not the magnetic strips. All transactions will be chips and PIN, and no signatures will be
required. Moreover, it is anticipated that there will be a huge decrease in point-of-sale fraud, from credit card
The new date? 2020! That date might finally be a reality. If you’ve read my previous articles, one of which was
written in August of 2015, before the original deadline, I predicted that the eventual rollout would be completed
in 2020. I guess I was at the other end of the road, waiting for the can to come to me.