EMV (Europay-MasterCard-Visa) or “pin and chip” cards have seen widespread usage since 1992 when their popularity surged in Europe. Embedded with a unique electronic chip, highly secure EMV credit cards effectively counter the threat of counterfeiting. EMV cards are most often processed by a card machine during a retail point of sale transaction. EMV technology has been largely focused on mid-size to large retailers, but is making headlines due to the upcoming liability shift on card present or “swipe” transactions.
There is a great deal of noise and miscommunication surrounding the upcoming EMV deadlines. The “deadline” only applies to retail stores or businesses with “swipe” machine transactions. Unfortunately, it has become a common sales strategy within the payments industry to pressure merchants into purchasing new EMV equipment, many times unnecessarily. This also means banks will now be issuing new, more secure chip cards to customers. Retailers and merchants are being asked to do their part by upgrading their terminals to accept the new EMV cards by October 1, 2015.
According to Visa, as of October 1st, 2015, the liability for fraudulent transactions will officially belong “to the party that is the cause of a chip transaction not occurring, and will be held financially liable for the resulting card present counterfeit fraud losses.” However, responsibility for fraud on your merchant account is nothing new. Most agreements already hold your business responsible for chargebacks, fraud, and bank fees on any transaction processed through your merchant account.
Why does your firm need to know about EMV?
Since most law firms do not handle transactions in a “retail” situation, or use “point of sale” terminal systems, EMV processing is not effective in identifying fraudulent transactions. In addition, law firms have a very low risk of accepting counterfeit credit cards. As a law firm, you have an advantage over traditional retailers because you know the identity of your clients, which drastically reduces the risk of accepting a counterfeit credit card. However, it is still important to maintain PCI Compliance and protect client and card holder information.
It is beneficial for law firms who accept credit cards to be aware of this liability shift not only because fraud is a part of every industry, but also because credit card processing for the legal industry has become much more common. For law firms, the larger issue with payments is ensuring their transactions are completely secure and the firm is PCI Compliant.
LawPay has good news for LawPay users, or firms looking for a better solution. Transactions processed through LawPay are done online and not considered a “swipe transaction” – meaning the EMV deadlines for retail, point of sale systems are not applicable. LawPay ensures all online credit card transactions are completely secure. Furthermore, this proven solution never stores sensitive card data from your clients, essentially eliminating the compliance liability for a law firm.
The LawPay solution is designed to correctly separate earned and unearned fees to avoid commingling funds when accepting credit card payments. More importantly, LawPay contractually protects your client funds by restricting the ability of any third-party from debiting monies from a Trust or IOLTA account. LawPay works in partnership with over 90 bar associations across the country, including the American Bar Association, to ensure our program is up-to-date and in compliance.