Outdated Credit Card Readers Could Increase Ministry Risk

Credit card issuers have shifted liability for fraud—your ministry may be at risk

If you have received a new credit/debit card recently, you may have noticed the addition of a square microchip on the card’s front. The new “chip card”—developed by major credit card companies and widely used already in other countries—is designed to thwart large-scale theft of credit card data. As chip cards are issued to consumers, businesses will need the new chip-enabled card terminals to process transactions. Ministry-run operations, like cafes and thrift stores, will be affected. 

The cost of the new chip-and-pin terminals start at around $300. If your ministry uses mobile-compatible readers such as Square or PayPal Here, upgrades are less expensive—starting around $30. At this time, all new chip-enabled card terminals will have the technology to accept both the chip cards and traditional magnetic stripe cards. All new credit/debit cards issued also include both microchip protection and a magnetic stripe.

Limit Ministry Liability by Upgrading Card Readers

While new credit card terminals aren’t cheap, it also could be costly for businesses that delay upgrading their systems. Beginning October 1, 2015, liability for some fraudulent charges shifted away from card issuers—like banks and credit card companies—to businesses that haven’t upgraded. In the past, charges resulting from stolen card usage generally have been the responsibility of the card issuer. Because the chip cards offer greater protection against unauthorized purchases, organizations that don’t upgrade may find themselves on the wrong end of the liability shift.

Who is Liable for Unauthorized Purchases?

In general, it comes down to which party uses the lesser technology—businesses that use a magnetic swipe-and-sign card reader or card issuers who don’t upgrade their consumers’ cards. Liability reverts to whoever has the outdated equipment. This means that if your ministry installs and uses a chip-enabled card terminal, it is far less likely to be held liable for fraudulent charges. Instead, liability generally will fall on the card issuer.

Protect Ministry Credit Cards

Consider upgrading your ministry’s card payment systems and requesting that your bank issue replacement company cards that use the new chip technology. Ministries can take additional steps to protect their business credit cards—read Protect Your Ministry's Plastic for helpful ideas. Upgrades to both business credit cards and card readers will help ministries enjoy greater fraud protection and a reduction in liability.

Square is owned by Square, Inc., and PayPal Here is owned by PayPal, Inc.