fi nd more online
“News Flash! Chip Readers are
Here – and So is Liability”JewelryMakingDaily.com/netprofi ts
I mentioned the liability shift, the
young woman checking me out seemed
concerned, took notes, and promised
to pass it along. A couple weeks post-
shift, I went into the same store and
was asked to swipe my chip card again.
Walmart was inserting my chip
card by the end of September. So was
Lowe’s and even my little neighborhood
hardware store. When I congratulated
the woman at the register there, she
told me all about the liability shift
and how her store wasn’t taking any
chances. My local supermarket, on the
other hand, part of a chain of 100+
stores, is still having me swipe my chip
cards as this magazine goes to press.
It’s not just independent sellers who
are behind on this!
I will keep my eye on this transition
as it aff ects independent jewelry sell-
ers, both here and on my blog, The Jew-
elry Loupe. In the meantime, check out
my Net Profi ts post on JewelryMaking-
Daily.com for more tips on upgrading
your credit card readers.CATHLEEN MCCARTHY is a freelance writer
whose stories on jewelry, travel, and com-
merce have appear in Town & Country, Art
& Antiques, and her own site, TheJewelry-
Loupe.com.that indicates an embedded chip. If it
has one, ask the customer to insert or
tap instead of swiping. (All cards made
in the U.S., even chip cards, still have
the magnetic stripe on back.)
“The only time fraud and liability
land on the independent business
owner now is if someone comes in with
a chip card that is counterfeit, and you
swipe the magnetic stripe of that card
on your computer without a new reader
that accepts that technology,” says a
spokesman for Square.
One month after the liability shift,
only 37 percent of the payments Square
sellers process were being made using
chip cards. This is up from 12 percent
in January, and increasing every month,
but slowly. This country clearly has a
long way to go to catch up with the rest
of the First World. You can bet fraud-
sters will be looking for a way to take
advantage of that.
If you’ve traveled outside the U.S.
in recent years, you know credit card
swiping — and the magnetic stripe
itself — is all but extinct in Europe,
Canada, and much of Asia. No chip
card in your wallet and you’re out of
luck at many kiosks now. Europe began
introducing chip cards soon after
2002, when EuroPay, MasterCard,
and Visa collaborated on EMV, a global
standard for chip technology.
While magnetic stripes off er the
same data every time you or your
customers make a purchase, chip cards
encrypt diff erent data for each transac-
tion, making them harder to clone or
use fraudulently.
My credit cards have been replaced
with chip cards in the past year, which
is a good thing because the magnetic
stripes on those cards — which are still
being swiped left and right here in the
States — do me no good anywhere else.
Even in Quebec last summer, just
over the border, I was glad I had a chip
card on hand, or I would have been
endlessly hitting the ATMs. Also this:
we’re a lot less vulnerable to fraud
when we insert rather than swipe, both
Stateside and overseas. And if you
swipe customers’ credit cards when you
sell your jewelry, that makes you more
vulnerable on the front and back end.
Many countries have already
transitioned from chip to contactless
payments, while we’re still struggling
to retire the mag stripe. Altering the
U.S. payment system to acknowledge
microchips hasn’t been easy.
“We have one of the most complicat-
ed payment ecosystems in the world,”
says Randy Vanderhoof, executive
director of the Smart Card Alliance.
Other countries made the transition at
a fraction of the time and cost. Canada,
for example, has fi ve primary fi nancial
institutions. “They only needed those
fi ve to agree and the entire card market
could change.”
By contrast, the U.S. has more than
10,000 card issuers, a million mer-
chants, and 8 million POS devices that
accept cards. “Businesses only make
investments on that scale if there’s a
demonstrated return,” Vanderhoof told
me. “They had to see that fraud was
bad and getting worse.”
So the U.S. is playing a mad game of
catch-up right now — which is why you,
as a seller, are being off ered both chip
processing and contactless payment
options, all in one fell swoop. Fortu-
nately, it’s a whole lot cheaper and eas-
ier for you to upgrade (and safeguard)
your card-processing equipment than it
is for a store, let alone a chain.
If you are late to this game, you’re
not alone. A week before the shift, I was
asked to swipe my card at a wine store,
one of 600 operated by the Pennsyl-
vania Liquor Control Board. When“The only time fraud and liability land on the independent
business owner now is if someone comes in with a chip card that is
counterfeit, and you swipe the magnetic stripe of that card on your
computer without a new reader that accepts that technology.”
January/February 2016^11