Cyber Lawyer on Your Side

3 Cyber Law Trends in 2015 Tracked by Sioux Falls Law Firm

Posted by Marie Ruettgers on Oct 9, 2015 11:00:00 AM

3 Cyber Law Trends in 2015 Tracked by Sioux Falls Law Firm

The United States has never been afraid to go against the grain in comparison to their international friends. From our love of American football to our refusal to the use the Metric system, the U.S.A. always does things a little differently. One way we are different, which may seem strange to you, is that we still use magnetic strip credit cards. Every other country primarily uses EMV cards. EMV credit and debit cards named after Europay, MasterCard, and Visa, who were the original developers of the technology, use a computer chip rather than a strip. Be aware, you might have to get used to EMV cards quicker than you think.

EMV Cards and the Liability Shift 

EMV cards, as opposed to traditional magnetic strip credit and debit cards, use a computer chip that is not able to be replicated. Each transaction uses a different code that expires after purchase. This non-static technology means that hacked card readers can’t just replicate the code and reuse, a problem that magnetic strip cards are very susceptible to. On October 1, 2015, the “liability shift” occurs, which places liability on either the merchant if they haven’t provided EMV-capable card readers, or the financial institutions if they haven’t offered their customers EMV cards.

The Resistance of Small Businesses

With EMV technology common place in every other country in the world, you might be wondering why the United States is lagging behind. Our current financial infrastructure is built to support magnetic strip credit and debit cards, and the total cost nationwide for the switch may cost in excess of $9 billion dollars. Even with cost set aside, small businesses and some experts are wary of the actual effectiveness of the system. In a Wells Fargo/Gallup Small Business Poll from July 2015, 40% of respondents either say cost is a problem for implementation, or they don’t see the liability shift affecting them. Experts, meanwhile, see the drop in fraud as a set-back for hackers, whose numbers will rise when they figure out how to hack the new system.

Why Your Business Needs EMV Cards

According to the Wells Fargo/Gallup poll, only 31% say they have upgraded to EMV technology while 29% will try to upgrade by the deadline. Thinking of making the switch as a “liability investment” is a way to sell your company on the cost that some might see as wasteful. If your company has ever had any problem with credit card fraud, switching to EMV technology should be a no-brainer. It is a proven fact that countries who switch to EMV technology, have seen a drop in fraud rates. In the United States, the only country in the world without a standard EMV system in place, fraud rate is rising.

While change can be hard, especially with a multi-billion dollar, coast-to-coast change, the investment is worth it in the long run. Experts predict that because of the liability shift, credit card fraud will be less next year than this year, the first time that has happened since the 1980s. While we don’t want to bring back big hair and KISS, lowering the amount of fraud in America is something that very few people can disagree with. In order to make this effective each company has to do their part, and a relatively small investment in the switch might just save your thousands in years to come.

For more information on cyber law and telecommunications law, contact the Goosmann Law Firm at or call (712) 226-4000. You may also contact the writer of this blog, Marie Ruettgers at our Sioux Falls law firm at (605) 371-2000. 


Topics: Cyber Lawyer on Your Side, Cyber Law Trends, EMV Credit Cards