Starting Thursday, the U.S. will finally migrate to EMV (short for Europay, MasterCard and Visa) chip technology.

The chip, like magnetic stripes, still stores users’ 16-digit account number and expiration date, the information, along with the security code, that fraudsters look for to make counterfeits, a Visa Inc.  spokeswoman said. But with chip technology, the security code is different for each transaction, and there are 18 quintillion possible code combinations, she said.

The EMV technology is effective in fighting counterfeit fraud, which accounts for about two-thirds of fraud perpetrated in stores, she said.

To help the broader migration to EMV chip card use, the credit-card networks said the liability for counterfeit fraud will shift to the merchant starting Oct. 1, if it fails to adapt to the new technology. Here’s how it breaks down:

• If a merchant swipes the magnetic stripe on a credit or debit card that has an EMV chip and it’s a counterfeit transaction, the merchant is liable.
• If the merchant’s point-of-sales terminal is EMV capable, but the card holder’s bank hasn’t issued an EMV-chip credit or debit card and fraud occurs, then the issuer is liable.
• If counterfeit fraud occurs on a transaction where the merchant scanned an EMV chip card with an EMV capable terminal, then the card issuer is responsible.

The liability shift means a lot of merchants, typically small-to medium-sized ones, must invest in new point-of-sales terminals that are EMV capable, which can be expensive.

“EMV chip card penetration is around 20%,” she said. “We certainly have a long way to go. The October deadline is not an end point, it’s really just the beginning, because we know adoption’s going to take a few years.”

Ranta is banking on 2020, at which time magnetic-stripe technology in payments should be all but retired. The shift should be a good first step, but he is intrigued by what it will do for mobile payments. A lot of the terminals that merchants are tapping for the EMV shift also have NFC capabilities.