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At last there is a liability shift deadline for U.S. ATMs. What does this mean for EMV card issuers (issuers of chip-and-PIN smart cards)? According to the revised MasterCard chip liability program, from April 19, 2013, EMV card issuers will be able to charge back counterfeit ATM transactions to U.S. ATM owners if the fraudulently used ATM is not EMV compliant. In an article published on this website on Sept. 8 Mastercard Worldwide spokesperson Seth Eisen was quoted as stating:

"On September 1, MasterCard announced it will extend its existing EMV liability shift program for inter-regional Maestro ATM transactions, as part of an effort to align technology efforts to prevent and manage fraud.

The liability shift will cover both the United States and Asia-Pacific regions and will be effective on April 19, 2013, with the exception of Australia and New Zealand, where the liability shift will become effective on Dec. 31, 2015...It should be noted that liability shift already applies for Europe, Canada and the Middle East and Africa and will be completed for Latin America by end of Oct. 2012."

This is particularly good news for European card issuers. Europe leads the world in terms of EMV and has been investing heavily into the technology for over a decade. According to statistics published by EAST, the European ATM Security Team, more than 97 percent of the nearly 400,000 ATMs in Europe are now compliant. 

According to an ATM Fraud Analysis Report published by EAST in July, many EU countries are now reporting that losses in the U.S. are making up the largest percentage of international losses. This is in line with the latest Organized Crime Threat Assessment published by Europol which states that around 80 percent of non-EU fraud against EU payment cards is committed in the U.S.

Last month Visa took the initiative in the U.S. market and announced plans to introduce a U.S. liability shift for domestic and cross-border counterfeit card-present point-of-sale (POS) transactions, effective Oct. 1, 2015. No mention was made of ATMs. Now MasterCard has seized the intitiative with its U.S. ATM EMV deadline. 

In terms of compliance, April 2013 does not give U.S. ATM deployers much time at all to plan for, and then roll out ATM upgrades. The EAST statistics show that it took five years for Europe to get from 52 percent ATM EMV compliance to 97 percent - and the U.S. is starting from zero! The European experience indicates that those that do not succeed in meeting the deadline will be heavily penalized as fraud migrates to their machines (compliant ATMs will not dispense cash if counterfeit EMV cards are used), and demands start arriving from EMV card issuers for loss reimbursement. The race is on!

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