October 2015 is when the Payment Networks’ Liability Shift takes effect in the USA. To understand what this is and what it means first we need to understand the technology. As credit card fraud increases a global way to combat it has become required. Credit Card typically use magnetic stripe to send run a transaction. I personally have seen someone clone the credit card without even touching it. EuroPay, MasterCard, and Visa (EMV), the new technology uses a small computer chip to protect itself, and it is much more secure.
So what is really HAPPENING on October 1st 2015? Currently if a credit card is used for fraud, the Credit Card Company will be held liable. After October 2015 the liability will fall on the party who has the worst technology. If a Small business uses the old system, they can still run the credit card transaction with the swipe and signature. However they will be liable for any fraudulent charges which happens during that transaction if the customer has a chipped card. However, If the credit card issuer didn’t provide a chipped credit card, but the merchant had a card reader with the new technology they will be liable.
Unfortunately for small businesses they must endure the costs of this technology upgrade, yet over all it will save everyone money. Europe has saved billions each year due to these requirements, and it’s time the USA was on board.