For Agents & Brokers
Are your customers ready for 'chip and sign?'
Failing to upgrade for microchip credit cards can lead to fraud losses
Are your business clients accepting the new microchip credit cards? If not, it could cost them. Because if they fail to upgrade their payment systems to process the latest chip technology, they could be liable for losses from credit card fraud.
Who pays for credit card fraud?
"In the past, banks usually covered the losses of fraudulent credit card purchases," said Eric Cernak, vice president and cyber practice leader for Munich Re. "Now, liability can shift to the retailer unless they upgrade their technology to accept the new chip cards."
A new standard for credit card security
Starting October 1, 2015, the new technical standard for credit card security includes microchips in the cards and will require the installation of new payment terminals to take full advantage of the new technology for in-store purchases.
Part of a global effort to combat fraud
Often called "chip and signature" because a customer inserts a chip card in the terminal and signs the screen, a similar standard has been used for several years in Europe and Canada.
How it works
The new chip cards create a unique code for each transaction, making it more difficult to counterfeit a card and make fraudulent purchases.
The pressure is on U.S. businesses
With banks now issuing millions of the new microchip cards, the pressure is on U.S. businesses to adopt the new credit card security standard at their point-of-sale terminals.
The switch has caused some confusion
The switch has confused many business owners, and some may not realize that they can be liable for credit card fraud unless they upgrade to accept the new chip cards.
Read more about the new credit card standard
HSB can help you learn more. In this article, Monique Ferraro, counsel in Munich Re's U.S. Cyber Practice at HSB, discusses the new standard, its limitations, and how it may impact a business and its customers.
An opportunity to help your customers
The new credit cards create an opportunity to have a conversation with business owners about their broader exposure to data risks.
HSB's insurance coverage for data risks
Or contact your HSB representative or more information.