Supermarket sues banks over chip card shift, says it lost $10K in 4.5 months

A small supermarket chain in Florida says that it has been ready for the shift to chip-based cards—but it can't get certified. (credit: Mike)

A Florida-based supermarket and liquor store chain has sued a variety of card networks and card issuers (PDF)—including Visa, MasterCard, American Express, Wells Fargo, and a number of others—over a recent shift in credit card technology that took place in the US last fall.

While the rest of the world has been migrating from insecure, magnetic stripe cards to relatively more secure chip-embedded cards for more than a decade, card networks and card-issuing banks in the US are only now demanding that retailers stop running mag stripe cards in favor of EMV cards. (EMV is eponymous for EuroPay, MasterCard, and Visa, the three corporations that developed the chip card standard.) The card networks decided years ago that by October 1, 2015, all retailers had to accept chip cards. If retailers couldn’t accept chip cards, then any time someone fraudulently used a card to make a purchase at that retailer, the retailer would have to pay for the chargeback instead of the issuer paying for the chargeback, as is common.

The liability shift was supposed to be the stick that would incentivize business owners to buy new terminals to accept chip cards. But Florida’s B&R Supermarket, which owns Milam’s Market and Grove Liquors, says it did all that—it bought new NCR Equinox L5300 card readers “well prior to the Liability Shift," installed them, and trained its staff to use them. But it never got “EMV certified” by the card-network consortium that has been managing the rollout, despite having notified the card networks and issuers that B&R Supermarket companies were ready to be certified. B&R Supermarket charges that this delay is part of MasterCard and Visa’s plan to make small businesses pay for fraud liability as long as possible.

Read 11 remaining paragraphs | Comments