Chip Liability Shift
While Card Issuers and Acquirers/Processors actively implement chip technology, the payment networks have announced Liability Shift and Technical Fallback dates, at which time the liability for fraudulent transactions will shift to merchants that have not implemented Chip & PIN devices.
The Payment Networks’ Liability Shift Dates
The Liability Shift timelines for each payment network are as follows:
- Visa® Canada Corporation has implemented a foreign Liability Shift date of October 1, 2010
- Visa Canada Corporation has implemented a domestic Liability Shift date of March 31, 2011
- Visa pay-at-the-pump AFD technology to December 31, 2012.
- MasterCard® International Inc. has implemented a domestic Liability Shift date of March 31, 2011
- MasterCard International Inc. has implemented a foreign Liability Shift date of April 15, 2011
- MasterCard pay-at-the-pump AFD technology to December 31, 2012.
- Interac® Association does not have a Liability Shift date, however Interac has mandated that all Interac debit acceptance devices be chip compliant and enabled by December 31, 2015. Additionally, any newly installed AFD solutions must be chip-enabled on January 1, 2011. 25% of existing Automated Fuel Dispensers (AFD) by December 31, 2012, 50% by December 31, 2013, 75% by December 31, 2014 and 100 % by December 31, 2015.
- American Express® liability shift & CAPN compliance to October 31, 2012.
Visa & MasterCard Liability Shift Extension to March 31, 2011
On September 24, 2010, Visa Canada, MasterCard Canada and their Canadian card-issuing financial institutions announced a six-month extension for Canadian merchants to migrate to Chip-and-PIN point of sale technology, effective March 31, 2011.
This date signifies when Canadian merchants become liable for domestic card-present fraudulent transactions that may have been avoided by adopting Chip technology. Liability involving chip cards used at non-chip devices was originally slated to shift on October 1, 2010, but issuers will continue to absorb the liability for domestic transactions until March 31, 2011.
For more information, please refer to the Liability Shift press releases from Visa and MasterCard:
- Visa Canada and its Issuing Clients to Temporarily Postpone Chip Liability Shift
- MasterCard Canada Extends Timeline for Chip Migration
Visa and MasterCard Liability Shift Extension for Automatic Fuel Dispenser Merchants
MasterCard Canada has extended the chip migration deadline for those Canadian petroleum retailers with pay-at-the-pump technology to December 31, 2012. This extension only applies to those petroleum retailers who have chosen to invest in Automatic Fuel Dispensers (AFD).
Visa Canada has extended the chip liability shift deadline for those Canadian petroleum retailers with pay-at-the-pump technology to December 31, 2012. Visa is providing to petroleum retailers a Conditional Concession that places the liability for fraudulent Automatic Fuel Dispenser transactions with Visa Issuers. Please contact Visa Canada or your Global Payments Sales Representative for more information regarding Visa’s Oil & Gas Conditional Concession package.
How does the Liability Shift impact you?
After the Liability Shift dates, merchants that do not have a chip-enabled POS and process a chip card transaction, will be liable for identified fraudulent transactions and chargebacks, such as; counterfeit, lost & stolen or card-not-received fraud, which could have been prevented by a chip card and chip-enabled device.
How is Global Payments addressing Liability Shift?
If you have not already updated to chip technology, you will be required to plan and implement for chip in order to meet the evolving payment card requirements that are starting to occur within Canada. Global Payments is actively engaged in chip migration to address Liability Shift.
- If you have a non-chip Global Payments POS device, Global Payments will be contacting you in the coming months to update you with a chip-enabled solution
- If you have a non-chip integrated solution, please contact your solution provider to assist you in your chip technology update, prior to the Liability Shift dates