You may remember the excitement around the requirement that all US retailers upgrade to EMV credit card readers by October, 2015. Some payment networks said they were going to implement a shift that would increase the amount that those accepting credit cards were liable for in the event that a card was fraudulent if the store was not using an EMV (short for Europay, MasterCard and Visa) card reader.

The deadline came and went without a high level of compliance, largely because of the huge cost of purchasing and programming new equipment.   In fact, six months after the regulation went into effect, it was estimated that 42 percent of retailers (including me) had not updated any terminals to EMV in any of their stores.

But now MasterCard is forcing the issue.  The credit card giant has run out of numbers starting with 5 (all Visa numbers currently start with 4, and all MasterCard numbers with 5).  So MasterCard is going to start using the number 2 at the beginning of its BINs (bank identification numbers), which are the first six digits of a credit or debit card number. Many older systems can’t handle this.

Only one of our current terminals can accommodate the upgraded software necessary to accept 2-series numbers, so we have to take action by the end of June.  Not doing so may lead to a “severe Category A noncompliance assessment for each noncompliant merchant.”  As Evan Schuman says in a blog for Computerworld, “On the plus side for Mastercard, this [change in card numbers] will likely force merchants to upgrade to EMV-friendly systems.”

MasterCard has been a leader in encouraging chip-and-pin technology,a and last August it announced that 80 percent of its cards had chips. They have provided more information about why they feel the move towards this more secure system is a good idea on their site: http://www.merchantlink.com/why-us/card-brand-compliance-mandates. But the long and short of it is that now is the time to get serious about upgrading your equipment, especially if had you put it off before. Because if you don’t, you may find yourself unable to complete some customer credit or debit card transactions after June 30.

Happy Retailing,

Carol “Orange” Schroeder