Old Mar 8, 15, 4:47 pm
Moderator: Manufactured Spending
Join Date: Jul 2011
Posts: 5,942
Originally Posted by tmiw View Post
Let's say someone owns a store called "Joe's Pizza". Joe decides not to upgrade to support EMV and contactless before October. Maybe he had to replace his terminal a couple of years ago and "it still works". Or he's never had to deal with chargebacks. Whatever the reason, October comes and goes and he's still swiping.

Hypothetically speaking:
  1. How long will it take until some international fraud ring discovers Joe's Pizza doesn't do EMV? Or even just some 16 year old kid in his parents' basement for that matter.
  2. How much will Joe stand to lose, really, from a single instance of liability going to him because that 16 year old kid used a cloned card? Would it be attractive enough to be worthwhile for every criminal in town to have "free" pizzas there?
I'm not trying to justify Joe not upgrading his terminal by asking those questions. I'm trying to see if there's a way to better reach businesses still on the fence without resorting to alarmism. (Apparently salespeople for merchant service companies are pretty scummy from what I hear.)
1. No "international fraud ring" is going to bother with a mom-and-pop pizza place. It isn't worth their time or hassle. They buy cell phones, jewelry, TVs, and other high-value items that can be quickly and anonymously resold for cash. The 16 year old kid is not likely to have the ability to clone a card, but is more likely to use a card that he found on the floor in a movie theater. Joe could instruct his staff to check ID for large purchases to mitigate that.

2. If there is a case of fraud with a mag stripe card after the date of the shift, Joe would stand to lose the cost of the order. For a pizza place, this is likely to be $10-20, which is pretty negligible for a business.

My feeling is that most mom and pop businesses will not meet the liability deadline. They will upgrade either when they get hit with fraud, when word breaks out that their colleagues with similar businesses are getting hit with fraud, or (most likely) when their bank sends them a new terminal. Until then, the marginal cost exceeds the marginal benefit.
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