ATM owners have until April 19 to implement technology that uses computer chips to authenticate debit transactions for MasterCard-branded cards that are issued by global banks and used at U.S. ATMs or face accountability for fraud losses.
“Virtually no one is going to be ready,” David Tente, the U.S. executive director for the ATM Industry Association, said, according to The Wall Street Journal.
The rule will affect approximately one percent of all U.S. ATM transactions. If the ATMs are not upgraded, the ATM owners and operators will be responsible for any fraud losses linked to the cards.
Counterfeit card use resulted in an estimated $426 million in fraud losses last year. New York police arrested four men last month after they allegedly used counterfeit cards at ATMs to steal hundreds of thousands of dollars, The Wall Street Journal reports.
Under current laws, issuing banks are responsible for fraud losses, not ATM owners. MasterCard and Visa have pressured issuing banks, merchants and ATM operators to switch to chip-based cards, which are considered to be more secure, but American banks have said they are more expensive to manufacture than traditional cards.
A number of deadlines extending through 2017 encourage the adoption of chip-based cards. Banks will eventually have to issue chip-based cards, and merchants will also be required to upgrade their systems and devices to process chip-based card transactions. MasterCard has established more aggressive deadlines than Visa, which will not shift liability to ATM operators until 2017, according to The Wall Street Journal.