Monday, June 30, 2003

Canada moves over slowly to EMV... so will the Netherlands....?

A recent article in Card Technology outlines that Canada is not planning to rush into EMV as the current card systems do not incur that much fraud to speed the EMV-implementation. Actually this is very much like the Dutch situation.

Yet, in the Netherlands we are subject to the so-called liability shift, imposed by EU regional card organisations. So although, at a recent first Dutch conference on EMV it became clear that we'd also better not rush into EMV, we may need to dismantle the imposed liability shift first. Legally, there appears to be plenty room for that; the imposed liability shift is basically a void legal arrangement under both competition law and principles of fair distribution of responsibilies and liabilities (as applicable through civil law). Also, Visa Canada sets the precedent:

"The Visa Canada Association decided not to set a deadline or impose penalties on members who do not convert to chip because there is no explosion of credit card fraud that requires immediate action, says Derek Fry, president of the Visa Canada Association.

All in all, I would not be surprised if the Netherlands becomes the first European country to ignore the liability shift as an legally irrelevant / void rule. Formally, we'll have to await discussions and further exploration in the Dutch society council on payment systems, but this one issue will be high on their agenda as it means that we can get ourselves the time to slowly and properly migrate to EMV.