On Oct. 21, 2016, ATM owner/operators will become financially responsible for valid EMV Code 70 counterfeit fraud chargebacks on all Mastercard® branded ATM transactions. Previously, ATM owners/operators were held liable only for counterfeit cross-border Maestro®transactions, which comprise less than 4% of the total Mastercard transactions made at ATMs supported by Payment Alliance International (PAI).
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For most, this will be a new type of chargeback and we want to make notification and reconciliation as efficient as possible. Additionally, I would like to emphasize the steps you must take to ensure protection against these fraudulent transactions and ways to mitigate potential financial losses. We have processed millions of EMV transactions at ATMs since late 2014 and our industry leadership has led to exemplary preparedness. When an EMV counterfeit fraud chargeback occurs, the total amount of the transaction is immediately deducted from the direct deposit accounts (DDA) associated with the withdrawal amount (vault cash) and the surcharge. In some instances, this may not be the ATM owner/operator. It is important that ATM owners and vault cash suppliers develop plans to reconcile and reimburse for valid chargebacks when they occur, since it is the ATM owner/operator who bears responsibility for the ATM’s chip transaction compliance.
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It is also important to point out that an EMV counterfeit fraud chargeback should not be confused with a Regulation-E (Reg-E) claim. In the case of a Reg-E, the cardholder claims the ATM failed to dispense the requested amount of cash. With an EMV chargeback, the cardholder alleges a fraudulent transaction occurred while the card was still in their possession at the time of the transaction. If your ATM is not fully EMV enabled, then you are liable for the EMV Code 70 fraud chargeback and associated fees.
