EMV Credit Cards, Part 2: Point-of-sale Devices, Alternatives

This guide is mostly for brick-and-mortar merchants, as the October 2015 rule changes, which I discussed in”Part 1,” are specific to card-present merchants. But, ecommerce merchants should understand the potential impact, as some observers predict that EMV’s additional security in the card-present level will lead to more fraudulent transactions for cards not existing.

Presently, card-present counterfeit losses are usually the responsibility of the issuing bank. But on October 1, 2015 the card companies are changing the rules for this obligation.

On this date, the lowest type of safety will be responsible for all these chargeback losses. That means a card-present merchant will probably cause the chargeback reduction if a transaction involved counterfeit card with a chip embedded, but the merchant didn’t have a point-of-sale device that could properly read and transmit EMV chip card info.

Consequently, the first decision merchants will need to make is if they want the financial responsibility for these chargebacks or, rather, if they would like to invest in the correct POS device to read and transmit EMV chip card info.

EMV credit cards.

I suspect that the card companies are expecting that the liability change will convince many merchants to obtain EMV POS devices. However, acquiring the EMV apparatus could help merchants serve their spouses, as cardholders are concerned about card and identify theft and several will presumably appreciate the extra security of EMV.

In actuality, as a consumer I am already annoyed by leading retailers that can’t process my processor cards. Cardholders will probably learn how to appreciate the added security of EMV. If so, how can your customers view your company if you can not process the chip card info?

Also, bad guys have a tendency to go to the point of least resistance. If you can’t process the EMV chip card information, you might be the point of least resistance. This is also the reason why several entities consider ecommerce merchants will see more fraudulent transactions. Consequently, ecommerce merchants should talk about possible gains in fraudulent activity and some other information and tools the supplier must block it.

EMV Factors to Know

  • PIN-enabled devices. Most processor cards will probably be”chip-and-signature” versus”chip-and-PIN.” To put it differently, the cardholder’s signature will be required rather than a PIN number. However, some issuers may need their cardholders to use a PIN number, which might create difficulties and additional cost for specific merchants.

By way of instance, restaurants normally have their POS devices away from the cardholder. Those restaurants might need to invest in wireless EMV PIN pads or alternative solutions to allow chip-and-PIN in the table. Also, service businesses, like doctors’ offices, frequently have their POS devices behind the front desk window. They might have to get an EMV PIN pad that connects to their POS device, so clients have privacy when entering their PIN number.

  • Apple Pay demands NFC capability. Not all suppliers can now process Apple Pay, even in case you’ve got a NFC receiver, since Apple Pay utilizes a format called tokenization so clients do not need to enter their card information at the POS device.
  • Chip cards can be processed as contact or contactless. An EMV POS apparatus should recognize a processor card if it’s swiped, and prompt the merchant to fit the card at the EMV slot, to read the processor data. In cases like this, the card is left in the slot during the whole transaction process.

Some POS devices and PIN pads have NFC (near field communication) capacity to allow a contactless transaction. NFC capable devices can read the processor information if the processor or other NFC enabled devices, such as a phone, are placed within a few inches of the NFC receiver.

  • Merchants who have software-based POS systems should discuss EMV with their POS provider. Not all POS systems now have an EMV solution. Therefore, merchants should make EMV a part of their talks when reviewing different POS systems.

What Should EMV POS Devices Cost?

The great news is that: If you’ve got a new terminal in the past a few decades, it’s likely EMV capable. It might need an upgrade and your supplier can have a swap-out program at a reduced cost or no cost to allow chip card processing.

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If you will need a new EMV terminal or PIN pad, realize that it generally costs the supplier $200 to $300 to get a brand new EMV terminal and approximately $100 to $125 for a new EMV PIN pad. Wireless devices are more.

Everything you will pay is up to your supplier’s business plan and your negotiation skills. I have found most reputable providers aren’t charging more than $350 for an EMV terminal and $150 for an EMV PIN pad. For those who have a salesperson that is prepared to examine your requirements, recognized the value of the service, in addition to the salesperson’s traveling and time when deciding a reasonable cost.

Finally, as I’ve written many times, I urge leasing programs. I’ve heard of EMV terminals being rented for around $99 a month for 48 months. If your supplier or salesperson attempts to rent the equipment to you, find a new supplier — for more reasons than just the equipment rental.

Wrapping Up

The purpose of this series is to offer a general summary of EMV chip cards, the accountability changes on October 1, 2015, as well as the choices card-present merchants will need to make specific to EMV approval. Merchants must discuss specific needs with their supplier, salesperson, and POS vendor to ensure they meet the October 1, 2015 liability requirements.