U.S. credit card processors are adding something called EMV technology to consumer credit cards, which stands for “Europay, MasterCard, and Visa.”

All this means is credit cards will be equipped with a super-small computer chip that’s extremely hard to hack or counterfeit. If you’ve gotten a card recently, chances are this technology will be on the front of the card.

Merchants will need a new processing device, or terminal, to read the information in the chip cards. By October of this year, businesses that don’t have the new EMV processing will be liable for fraudulent chip card transactions and not the card issuer.

Believe it or not, almost half of the world’s credit card fraud now happens in the United States – even though only a quarter of all credit card transactions happen here. Magnetic-strip cards, which are much easier to counterfeit and hack, are the reason.

So, here’s the skinny: At the present time, if a merchant runs a fraudulent card, the card issuer is liable. Starting in October, if someone swipes with a fraudulent card, and the merchant isn’t EMV compatible, the merchant will be liable.

Say, for example, a fraudster pays $300 for dinner at a restaurant with a fraudulent card. If the restaurant doesn’t have a chip card reader to process the transaction, it could be on the hook for the $300.

If the restaurant is EMV compatible and has the new chip card-reading terminal, the responsibility for the fraud is on the card issuer.

It’s a new way of processing transactions that some folks call the “chip-and-dip.” The new terminals have a slot where the cards are inserted, or “dipped,” into the terminal. The card stays in there for several seconds as the terminal reads the chip and encrypts the transfer of information so fraud is virtually impossible.

“Getting an EMV-enabled device is a good thing to start considering,” said Brad Wilson, of Merchant Service Center of Hilton Head, a credit-card processing company. “The sooner you’re set up, the sooner your business will be better protected. Consider it like an insurance policy with a one-time premium.”

The United States is actually the last major market still using magnetic-strip-only cards. Europe, as well as most of the world, has been using chip cards for years. Even though the deadline for the new EMV regulation is October, it might be a few years before everyone comes to the dance.

Michael Novitski is director of sales and marketing for Merchant Service Center of Hilton Head Island. www.mschhi.com