How New EMV Credit Cards Could Affect Churches

One of the most important deadlines of the year is fast-approaching, and most churches don’t even know it.

Almost half of the world’s credit card fraud happens in the United States even though only a quarter of all credit card transactions take place in the U.S. This is largely due to the old “swiping” magnetic strip card readers, which are less secure than what almost every other country now uses – EMV “dipping” cards. In an effort to encourage a more secure system, the U.S. will shift liability for fraud starting on October 1.

These new and improved cards are being deployed to improve payment security, making it more difficult for fraudsters to successfully counterfeit cards.

Why are EMV cards more secure than traditional cards? It’s that small, metallic square you’ll see on new cards. That’s a computer chip, and it’s what sets apart the new generation of cards.

The magnetic stripes on traditional credit and debit cards contain unchanging data. Whoever accesses that data gains the sensitive card and cardholder information necessary to make purchases. That makes traditional cards prime targets for counterfeiters, who convert stolen card data to cash. If someone copies a magnetic stripe, they can easily replicate that data over and over again because it doesn’t change. Unlike magnetic-stripe cards, every time an EMV card is used for payment, the card chip creates a unique transaction code that cannot be used again.

What does this mean for churches? If your church processes credit card transactions through a reader, and it hasn’t switched to the new EMV card readers by October 1, then the church becomes responsible for any fraudulent activity stemming from transactions. Traditionally, credit card companies or banks issuing cards were responsible for any fraud that occurred with the card. Beginning October 1, however, whoever accepts the older card system will be liable. This means that churches processing payments on EMV cards with old devices could be on the hook if they process an upgraded card with an old magnetic strip card reader.

The new payment terminals will still allow you to use the magnetic stripe option, so you’ll be able to use your old card if your issuer doesn’t send you a chipped one right away. However, credit card companies are reporting that every household or institution will have at least one EMV card by December 2015, if one has not already been issued.

To assure that your church is not liable for the fraudulent use of a credit card, you should convert your credit card reading devices to the EMV readers immediately. Time is running out.

About benefitsboard

Art Rhodes is the President and CEO of the Church of God Benefits Board, Inc. - the administrator of the Ministers' Retirement Plan and the Church Loan Fund, Inc. The corporate offices of the Benefits Board are in Cleveland, TN.
This entry was posted in 09 - September 2015, Expenses, Uncategorized. Bookmark the permalink.

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