As merchants and issuers slowly transition point-of-saledevices and payment cards to EMV, the next major step in themove from magstripe to chip technology has begun to loom: The shiftdeadline for ATMs and self-service fuel dispensers.

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The liability shift deadline for ATM transactions made withMasterCard branded credit and debit cards is Oct. 1, 2016; Visa'sdeadline is Oct. 1, 2017.

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Experts said as credit unions continue to migrate theirmagstripe plastic to chip cards, they should not neglect theimpending deadline for making ATMs EMV-ready. They must alsoprepare to educate members on the new ATM technology and emphasizechip card benefits.

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“Every financial institution or anyone that has an ATM should belooking to upgrade their ATMs to meet that upcoming liabilityshift,” Art Harper, director of card payment solutions at the St.Petersburg, Fla.-based payments CUSO PSCU, said.

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One expert emphasized the ATM transition isn't a mandate. It's aliability shift, and issuers and merchants have the option not doit.

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“If the ATM owner has gone through the cost of certifying it andit is a magstripe card that has been compromised, then theliability goes to the issuer of that card, the credit union or thebank,” Jamie Topolski, director of alternative payment strategiesat the Brookfield, Wis.-based core processor Fiserv,explained.

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On the other hand, if a credit union or bank has upgraded itspayment cards to include the EMV chip but the ATM owner hasn'tupgraded its ATMs, the liability falls on the ATM owner in theevent of a fraudulent card transaction.

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While there is no mandate for the ATM transition, the threat offraud might be enough to convince ATM owners to complete theupgrades. Skimmers have been attacking older ATMs in final efforts togather card information from the weakest points of the ATMnetwork.

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Some industry observers, such as the National ATM Council, saidthey believe only 40% to 50% of ATMs will be EMV ready by October2016. According to the council, Visa currently has 217 million EMVcards in the U.S.; 115 million are credit and 102 million aredebit. MasterCard said approximately half of its U.S. consumercredit cards (192 million as of December 2015 per the Credit CardForum) are EMV enabled.

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All automatic fuel dispensers must be EMV compliant by October2017 to comply with the liability shift.

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Fuel merchants received extra time because self-service pumpsneed their wiring upgraded to a broadband environment. They alsorequire recertification by state officials to verify they aredispensing and charging correctly.

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“The state governments are saying they can certify all the pumpsin a timely manner,” Harper said.

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However, there are still some unresolved EMV related issues,such as the widely-perceived slow transition at POS terminals. Inaddition, the longstanding issue of PIN versus signatureauthorization has re-emerged.

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Read a full account of current EMV issues in the April 27,2016 print issue of Credit Union Times.

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Roy Urrico

Roy W. Urrico specializes in articles about financial technology and services for Credit Union Times, as well as ghostwriting, copywriting, and case studies. Also: writer/editor of a semi-annual newsletter for Association for Financial Technology since 1997 and history projects funded by the U.S Interior Department, National Park Service and Warren County (N.Y.).