June 23, 2016
MasterCard this week launched a program aiming to make the certification process quicker for merchants that want to implement EMV. In the months since the card brands imposed a shift in liability for in-store fraud from issuing banks to merchants if they have not converted to EMV-compliant POS terminals, chargebacks have exploded, sending merchants scurrying to implement the new systems in their stores. The rush, however, has overloaded the process by which the brands certify those systems. So, even if a merchant’s stores are outfitted with the proper technology, until it is certified, the merchant remains non-compliant and, thus, subject to fraud losses. The issue has even resulted in a class action lawsuit on behalf of merchants that feel it is unfair to hold them liable for fraud when they have made good-faith efforts to update their systems and are blocked simply because they are waiting for certification.
To help alleviate the backlog of merchants awaiting certification, MasterCard has proposed a new process that gives more responsibility for testing to acquirers and reduces the number of tests by nearly 60 percent. It also will ramp up the resources available to acquirers and value-added resellers—the organizations responsible for executing the card brands’ testing processes—enabling faster terminal deployments and enhanced ability to troubleshoot issues in the field. MasterCard said the improvements to the process should cut certification time from weeks to hours.
The delays in EMV implementation encountered by merchants and payment providers has opened a window for fraudsters to continue counterfeit fraud efforts in stores, racing to utilize a mountain of stolen information before EMV makes that type of fraud exceedingly difficult. CNP merchants continue to keep an eye on EMV deployment, expecting a surge in rates as more stores implement EMV and e-commerce becomes an even more attractive target.