With the major industry shift to Europay, Mastercard and Visa chips in credit and debit cards, financial institutions need to consider the implications for ATM technology. Growing instances of identity theft and data breaches have provided the impetus for this transition. Currently, retailers are responsible for large-scale cyberattacks, but the liability will be placed on banks and credit unions next year.
Traditional magnetic-stripe credit cards are more vulnerable to fraud and duplication, according to The Columbus Dispatch. The microchips in EMV-enabled cards are intended to mitigate this threat. Some also utilize a personal code when making a transaction. Many banks and credit unions are already starting to offer customers and members these cards, and some retailers are expected to make the transition this year.
ATMs can be a solution to obstacles of the EMV shift
In October 2015, financial institutions will have to accept the liability for credit card fraud. While many community banks and credit unions will begin issuing EMV chip cards this year, some financial institutions have no plans to do so, The Credit Union Times reported, citing data from the PULSE ATM Network.
The study revealed 17 percent of credit unions do not plan to issue EMV-enabled debit cards, even though it would increase their risks after the October 2015 liability shift. Other groups in the industry were somewhat behind in their plans for the transition.
Although there are many moving parts in the transition to EMV technology, ATMs need to be a consideration in the move. Shifting from magnetic-stripe cards to EMV-chip cards represents a major transition in the personal banking industry. Financial institutions need to prioritize the transition to EMV to mitigate risks from the liability shift.
July 11, 2014