On October 1, the landscape of fraud liability for credit card transactions changed significantly. Simply, businesses are now liable for fraudulent charges if or when a customer uses the EMV (Europay, MasterCard & Visa) chip-based card AND fraud still occurs AND that business did not upgrade their payment system. 
"Small and midsize businesses may have missed, or possibly dismissed, a landmark change in the card payment space that kicked in at the start of the month -- and it could end up costing them big bucks," said Howard Kass, CPA, AEP, CGMA, partner and lead of the firm's tax services department.
Credit card holders have been receiving new or replacement cards designed with chip-and-pin technology, a feature that stores data on integrated circuits rather than magnetic stripes, as has been with most credit, debit or bank cards. The new EMV cards are designed to improve the security of data and as a result, reduce the potential for fraud.
"As a business owner, it would be a beneficial move to invest in the new card terminal rather than risk the finanical liability should a breach of data occur. Hackers and scammers are not backing down; during this transition time it has recently been reported they are targeting those who have not yet received their new cards," Kass said.
According to a September 2, 2015 article in the Wall Street Journal, about 10% of U.S. small businesses were victims of payment fraud, including the type of credit-card fraud the switch aims to prevent, in 2013, the most recent data available, according to Javelin Strategy & Research.
"Our team of professionals has advised countless businesses to help ensure not only compliance from a financial perspective, but also decisions that could impact the future of their business. This is a great example of why it is good to have that conversation before any situations arise," said Kass.
The Zinner team of financial and business advisors can help prepare you and your business for optimum performance. We're ready to help; contact us at 216-831-0733 or info@zinnerco.com for a no cost, no obligation consultation.
