What do the United States, Mongolia, and Papua New Guinea have in common? According to Bloomberg, they're amongst the last few holdouts in a world-wide push to upgrade credit card security. While most of the world, Europe especially, have moved to "Chip-and-Pin" systems, the United States is still plodding along with magnetic strips -- a 1960s technology that makes data breaches far easier to accomplish.
Why does your law firm care? If you take credit cards, you're going to be forced to make a big choice in the next year or two: upgrade your equipment or assume liability for any fraudulent charges.
If you go to the grocery store, you probably swipe your card and tap in a PIN number. The local food truck swipes your card on their handheld reader. The only time you don't swipe is when you're purchasing items online.
Over the next few years, that process will change -- slightly. Instead of swiping a magnetic strip, you'll insert your chip-equipped card into a machine that authenticates the card. The chip promises to be more secure than an easily-copied magnetic strip. Online purchases, where you type in your credit card details manually, will not change.
Here's the most important detail for small businesses, law firms included: you'll be liable for fraudulent magnetic swipes.
Currently, a fraudulent swipe is covered by the card issuer. According to Bloomberg, in October 2015, retailers will be liable for fraudulent magnetic swipes, which is quite the motivator for those who are reluctant to upgrade their point of sale equipment.
Does Your Firm Care?
The odds of a client using a stolen credit card to pay his or her own lawyer are incredibly slim, but then again, never underestimate the stupidity of certain classes of clients. Besides, there are other possible weak links as well -- a rogue staff member with a gambling and substance abuse problem, for example.
If you run your payments through an online processor, this switch will mean little to nothing to you. But, if you swipe cards in your office, you'll want to contact your payment processor and ask about upgraded "Chip-and-Pin" equipment. Fortunately, portable readers that attach to your iPhone are already popping up in Europe, and should be available stateside once the new cards are more widely deployed.
Are you chip-and-PIN ready? Have an opinion on these newfangled devices? Tweet us @FindLawLP.
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