Is Jacksonville ready for card swiping changes?

Card companies will pick up fraud tab only for 'dipping' starting in October

MIAMI BEACH, Fla. – Big changes coming to credit card security are meant to keep customers safe from fraud and identity theft. But are local business ready and are local consumers aware?

One of the changes is a transition to "dipping" rather than "swiping" at most checkout counters. The impact to businesses will be significant given the upcoming so-called fraud liability shift.

The new payment technologies, transaction security and changes in fraud liability rules become active Oct. 1. 

As of right now the policy for business owners is, if fraudulent activity occurs, the card company assumes the risk. But that will change in October for merchants who don't have a chip card reader.

After Oct. 1, businesses that don't have EMV chip readers to read EMV chip cards will be liable for any fraud that occurs on those cards because they were swiped at their business.

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"We can't be liable for that. We run large purchases. I can't run the risk of being liable for a big purchase," said Joshua Gavronsky, manager of Miriam's Jewelry store. "It's mobile. It can be on our phones. There's a little device we can carry with us when we go out of town and still use the chip technology, so it's been great for us. And it wasn't very much money."

EMVs, also called chip cards or smart cards, are similar to contact-less payment methods like Apple Pay, in that when customers dip the card or tap their phone, it encrypts a unique transaction code in place of the card number. For now, users won't use a PIN with the dipping technology, but a signature is required.

According to Chase Bank's website: "EMV chip technology is becoming the global standard for credit card and debit card payments. Named after its original developers (Europay, MasterCard® and Visa®), this technology features payment instruments (cards, mobile phones, etc.) with embedded microprocessor chips that store and protect cardholder data."

Europe has been utilizing the chip technology and contactless EMV for years.

"You can use it on your bank cards and getting on the tube," said Liam Moon, who was visiting from London during a Miami Beach small business event. "To pay for things it's very easy, easy for places like Starbucks, so it's very convenient for us."

Mike Molyneaux, who's worked at San Marco Bookstore for 16 years, said it's important for businesses to avoid being liable for fraud costs.

"When businesses have losses, they have to build that into the price of the product or squeeze benefits or wages for people to afford the loss," Molyneaux said. "So if the chip technology can reduce that, it's good for the businesses and it's good for the customers."