Why most U.S banks did advocated and issued the EMV chip-cards?
Before the Liability shift, or otherwise before October 1st, 2015, the banks were accountable for fraudulent purchase with the understanding that the banks would have done something to prevent the identity crimes. Since the banks were losing their funds as a result of compensation, the banks had to look for alternative strategies to curb the fraudulent transactions. Adjusting to what most Europe countries had already adopted decades ago became very sensitive to most U.S banks. Therefore, most banks took the incentive of advocating for EMV cards to verify the cardholder`s identity before any transaction. The other logic behind the shift to EMV chip-card is the since the merchant were less accountable to the identity crimes advanced through the magnetic stripe cards the merchant were reluctant and less concerned with the possibility of fraud transaction. It is at this point that the credit cards frauds became a national issue, and the government was partially involved. Though the government was involved at some point, one should understand that the initial steps were instated by the banks as well as the other prevailing networks that process payments (such as the MasterCard, Visa).
Evidence that the federal government did not mandate the EMV shift
Though the U.S. government has the power to step in and force the adoption of the EMV technology, as a way of preventing fraudulent use of credit cards in transactions in case a stolen credit card is present at a merchant’s terminal, the government did not initiate or drive the shift. Probably the reason behind the relaxation of the Federal government was a way of protecting the magnetic stripe-card institution. However the government cannot be blamed for this since one of its obligation is to safeguard the right of business.
Banks and the networks that process payments also prefer to avoid regulations in order to prosper in the economic world. Therefore, they decided to initiate the shifting to EMV technology for their financial gain.
Also, if the Federal government had mandated the shift, it could have backed it up with tax penalties and fines. There are no fines or tax penalties that merchants incur in case the liability is shifted to them.
It is only after the banks and payment networks initiated the process that Obama administration issued the executive order to for the federal employees to migrate to the EMV chip-pin credit cards.