Many ATM owners and operators have been worried about a the deadline regarding who is responsible for the losses of cardholders victimized by fraudsters.

Since April 19, ATM owners and operators will be required to equip their machines to read the smart chip cards that are popular with European consumers. These cards are on the Maestro Network, which is owned by MasterCard. Owners and operators who fail to keep up with the newer technology will start being held responsible by MasterCard when losses occur.

Major Changes in Technology

The April 19 deadline was originally set by MasterCard in 2011 as a result of complaints by European banks, who had been suffering major losses as the result of fraud when consumers using the Maestro card visited the United States. Although this is the first deadline of its kind, all four of the major credit card brands, Discover, MasterCard, Visa and American Express, are behind a drive for the United States to switch from its outdated magnetic strip cards to the new smart chip cards. Changes in this area will continue to develop through 2017. The U.S. is the last G-20 country to make the change, people may experience significant changes at retail establishments and ATM machines.

Global Standards Take Over

The worldwide standard for credit card technology is EMV, which stands for Europay, MasterCard and Visa. This standard is behind the drive to ensure compatibility between smart-chip cards and ATM machines. Smart-chip cards, which are considered to be more secure than the cards using magnetic stripes, contain an integrated circuit which holds information about the cardholder and handles processing. Although most of the world has already made the switch, the United States has continued to hang onto the old cards. As a result, the U.S. has a reputation for being a major site of credit card fraud that results in annual losses of about $8.6 billion.

Different Views on Changes

The deadline for credit card processors to show their ability to handle EMV cards was April 1. According to the EMV Migration Forum, a group that works across industries and is managing the shift, that deadline was met with success. As the deadline for ATM machines approaches, it is clear that not everybody is happy about the change. For example, the executive director of the ATM Industry Association has stated that ATM owners are being unfairly picked out for an increase in liability before changes are made by retailers and others who handle payments.

The ATM Liability Shift Won’t Affect Consumers

Once the April 19 deadline has passed, just a small portion of the 400,000 ATMs operating in the United States will be affected.

The change is only required on ATMs that handle larger amounts of business with foreign consumers who use Maestro cards. For the most part, other ATMs won’t have to switch over to EMV technology for two more years. However, upgrading an ATM for EMV technology can cost as much as $3,000, so the shift isn’t easy for many ATM owners and operators.

ATM Shutdowns

Long-term plans by ATM owners and operators aren’t fully known at this point, but some of the biggest operators are now looking at preventing fraud losses by just shutting down the ATMs that handle the most Maestro transactions.

Some worry that this could result in vacationing European families being unable to withdraw cash when they need it.

One of the largest ATM operators, Wells Fargo & Co., has claimed that it isn’t going to switch over any of the ATM machines it operates ahead of the deadline. Instead, the company is planning to concentrate more on other methods of preventing fraud. While the company plans to deal with Maestro fraud losses for now, it will convert its machines to EMV later. Wells Fargo, with its 12,000 machines, is unusual among the major banks, who are largely already working on making their upgrades in time for the deadline.

Short-Term Issues

U.S. Bank controls more than 5,000 ATM machines and is presently involved in changing its internal systems to handle EMV transactions. However, the bank’s fraud risk is relatively low considering their minor presence on the East Coast, where Maestro transactions are most common. The company says that it will be working on the EMV upgrades in the next two years. Meanwhile, MasterCard has already received letters from the ATM Industry Association asking it to move its deadline back or let operators simply deny Maestro cards. MasterCard declined their request, and the industry association said that it is presently considering legal avenues.

Not Mandatory

According to MasterCard, the deadline isn’t a drastic event or ultimatum. ATM operators who aren’t prepared to upgrade but concerned about liability for fraud losses can even get software from MasterCard at no charge that will help them analyze and reduce fraud involving their machines. MasterCard believes that its approach is working overall.

Smaller Operators Also Affected

Many of the machines that require upgrades are owned and operated by major banks or companies such as ATM networks, which is the country’s biggest independent ATM owner and operator. The coming change may be easier for these companies to absorb over time. Many other ATMs are run by smaller owners and operators, and the upgrade process is likely to be a bigger financial burden for them. In many cases, these businesses will require a few years to complete the changes. Meanwhile, they have greater concerns when it comes to increased liability for losses due to fraud.