Doomsday Part II. Is EMV the New Y2K?

Thursday, September 03, 2015

Remember all the hype, drama and preparation leading up to Y2K? Did you have neighbors hoarding canned goods and gallons of water by the truckload in their basement…or perhaps, YOU were that neighbor?

For businesses, another sort of Y2K scenario is rapidly approaching. On October 1, the EMV liability shift will begin. In simple terms, it means liability will shift to the party with the least secure technology. Your business could be responsible for chargebacks resulting from acceptance of lost, stolen or counterfeit cards if you don’t have a working EMV terminal installed.

Just like Y2K, there’s been a lot of hype, drama and preparation leading up to the launch of EMV. Now the question is… how concerned should businesses really be with this shift? Let’s explore the similarities, confusion and conflicting information when comparing these two events.

The Similarities


With Y2K so internationally advertised, much of the world was privy to the scare tactics publicized as the year 2000 rounded the bend. So unless you own a business, scare tactics regarding EMV might not be as apparent, but they are definitely present.

As Y2K approached, people around the world were extremely concerned about digital and non-digital documentation and data storage malfunctions as the clock struck midnight on Monday, January 1, 2000. The fear was that computers all over the world would crash when the two-digit number used in displaying the year rolled into a double zero. The seconds came and went and besides a few glitches, the whole ordeal was pretty uneventful.

Just like Y2K, there have been hundreds of articles warning businesses about not being EMV-ready on October 1 and the potential consequences. The truth is that if your business isn’t EMV-compatible, chargebacks resulting from acceptance of lost, stolen or counterfeit cards could negatively affect your bottom line.

Confusion and Myths

As with Y2K, there have been many myths surrounding EMV compatibility. Y2K experts predicted when computers malfunctioned, entire city infrastructures would crumble, affecting everything from transportation systems to financial institutions—causing utter chaos. Because of this, businesses were urged to upgrade their computers before the end of 1999 but were torn because of all the conflicting information.

Current business owners are trying to weed through the same issues surrounding EMV. The confusion on whether EMV is mandated, required to be PCI-compliant, forces magnetic stripe extinction, or protects against data breaches, is making the decision to upgrade more difficult.

End of the World?

Y2K ended up sounding more like a clink than a kaBOOM! Other than a few minor glitches reported around the world that were quickly remedied, many concluded that all the fear, worry and terror embedded into our brains leading up to January, 1, 2000, was unjustified.

And although the deadline for EMV is right around the corner, your business will still be able to accept magnetic stripe cards on October 2 and beyond. And you will still have the opportunity to become EMV-compatible even after the deadline. Y2K didn’t unfold the way all the experts predicted, but not becoming EMV-compatible could burden your business financially in the long run. Educate yourself and know your options.

The Reality

Most important: Y2K was over in the blink of an eye. EMV is here to stay.

Success in other countries and its ability to thwart card counterfeiting are two of the reasons why EMV won’t be going away. Despite transitioning to the EMV chip card, magnetic stripes are also placed on EMV cards because it isn’t mandated for businesses to become EMV-compatible. It has been reported that 83 percent of payment card fraud in the U.S. is counterfeit or Card Not Present fraud. Although EMV reduces counterfeit card fraud, it won’t protect you from a card data breach that could devastate your business.

So although EMV isn’t mandated, the consequences of not upgrading could wreak havoc on your bottom line. Do your research and decide if being liable for counterfeit, lost and stolen chargebacks would just be a bump in the road or cause you to close your doors for good.

  • Click here for a brief summary on factors to consider when thinking about implementing EMV.

  • Heartland is here to help navigate the switch to EMV. Click here for more information.