ATM Operators Will Be Liable for Chip-Enabled Mastercard Fraud Starting October 21st
One year after America transitioned to EMV chip cards, many card providers and merchants still haven’t made the switch to smartchip technology. Mastercard has set new rules for ATM operators that will make them liable for fraud costs, beginning this Friday, October 21. Until now, ATMs have been kept out of the liability loop, with the focus on retailers and point of sale machines.
The policy change with ATM operators was set to take place on October 1, but Mastercard decided to extend it an extra 20 days to give ATM operators more time to install new software and hardware on their machines. There are a number of manufacturers that make EMV conversion kits for new and old ATMs, but some older machines are not compatible with the new technology. For those machines, the only option is to completely replace the ATM.
Converting to chip technology is not a simple process. It requires new card readers to process the smartchips, as well as software that can be integrated with the existing programs on the machine. This is one of the reasons why many ATM operators have yet to make the switch, because they have not had enough time to execute these actions across their fleet of machines. If they refuse to do so now, they could face hefty fines in the event of a fraudulent transaction on a Mastercard used at one of their machines.
The Wall Street Journal recently cited a study from FICO that showed ATM compromises “jumped more than sixfold from 2014,” reaching record-high numbers in 2015. This gives Mastercard and other card providers all the more incentive to put the pressure on ATMs to support EMV transactions.