February 4th, 2016 by Elma Jane
Companies providing electronic money services, such as online or mobile payments accounts, have more than doubled since 2013.
This number has been on the rise over the past few years as consumer confidence in alternative payments methods has increased.
UK consumers and businesses are increasingly comfortable with the idea of a cashless economy, in which they might not be able to physically see or access money. More are embracing pre-paid cards, contactless and mobile payment systems for ease of use, efficiency and enhanced security.
According to a specialist financial services regulatory consultancy, there has been a significant increase in the number of electronic money providers registered with the Financial Conduct Authority (FCA).
E money providers must be authorized with the FCA under the Electronic Money Regulations 2011 and meet stringent consumer protection criteria, including adequate capital, the separation of customer’s money from the company’s funds.
The regulatory background is complex and electronic money providers need to ensure that systems, processes and controls are tight to ensure a high level of consumer protection. The FCA is not afraid to place these businesses under a microscope.
Many are concerned that this increase in alternative payments methods will lead to the death of the traditional bank, but only if they fail to innovate and adapt to market trends and consumer needs.
Posted in Best Practices for Merchants Tagged with: bank, cards, consumers, contactless, customers, electronic money, financial services, Mobile Payments, online, payment systems, payments, payments methods, provider's, Security
May 6th, 2014 by Elma Jane
Boston-based Loop has released its LoopWallet app for storing magnetic-stripe cards on smartphones and using them in contactless payments at regular POS terminals.
Loop is a Level One PCI certified payment provider. Its technology has applications for turning loyalty cards into contactless cards and can also be used to generate dynamic card data every time a payment is made, preventing the creation of cloned cards.
The Loop Fob contains a microprocessor and magnetic induction loop and can be used without a phone, in which case payment would be taken from a designated card.
Mag-stripe cards for payment, gift, loyalty, ID or membership are read by the Loop Fob, a small audio jack magnetic-stripe reader, and then card data is encrypted and stored on the user’s smartphone. The LoopWallet app allows users to view their cards and select the one they wish to use.
To make a payment at the point of sale, the phone sends a signal, using Loop’s Magnetic Secure Transmission technology. MST emulates the signal generated when a mag-stripe card is swiped across a POS terminal’s read head. The signal is received by any mag-stripe card reader without requiring modifications to the POS terminal or processing system.
The free LoopWallet App for iOS 7 is available in the Apple App Store, with an Android version planned for release in April 2014. The app is only available to U.S. consumers.
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Posted in Best Practices for Merchants, Credit card Processing, Digital Wallet Privacy, Electronic Payments, EMV EuroPay MasterCard Visa Tagged with: contactless, mag-stripe readers, magnetic stripe, mobile wallet, PCI
April 15th, 2014 by Elma Jane
Amsterdam, Netherlands-based Cardis has been piloting its technology in Europe with Raiffeisen Bank in Austria and Sberbank in Russia. They are now focused on the U.S., as this is the fastest growing mobile payments market in the world, where there’s a huge opportunity. Integration of technology with a large U.S. processor and with a major U.S. retail brand, which will be launching a mobile site and mobile app using Cardis solution.
Cardis International is planning an April launch in the U.S. for its technology, which enables merchants to accept low-value contactless or mobile payments without incurring high processing charges. Cardis is able to bring down the processing cost of low-value payments, the company said, by aggregating multiple transactions into a single payment.
The problem
Contactless card and NFC-based mobile payments are typically for low amounts, and yet still use a card processing infrastructure that was designed 40 years ago when the average credit card transaction was $100.
Traditional card processing systems require each transaction to be individually processed through the payment system, including authorization, clearing and settlement. The resulting variable costs of processing each transaction are independent of the transaction amount and too high for low-value payments, particularly in low-margin industries such as quick-service restaurants. QSR restaurants often have a 3 percent profit margin, yet, for low-value contactless payments, the processing cost could be as high as 6-7 percent of the transaction value.
Mobile and contactless cards offer consumers a convenient form factor. But they don’t solve the problem that low-value card payments are very expensive for merchants.
As an ever-increasing percentage of transactions have become cashless, card processing fees have become a significant cost. Costs that are based on the number of transactions, rather than their value. With average per person expenditures of $5 or under, feels each swipe fee much more than a business where customers spend $50 or more. But not accepting credit/debit cards for low-value transactions isn’t an option as many of customers don’t carry cash anymore.
Aggregation
Cardis’ solution is to act as an aggregator of low-value payments, sending a single batched transaction through to a processor instead of multiple low-value transactions. As there is no per transaction processing of individual low-value purchases, the cost-per-transaction is significantly reduced.
Cardis provides its technology as a software plug-in to payment service providers for contact-based and contactless card payments, mobile wallet transactions and NFC payments.
There are two models. For card payments, it will aggregate multiple purchases by an individual cardholder at a single merchant on a post-paid basis up to a specific amount, for example $20. To guarantee payment to the merchant, since the aggregated transaction is processed at a later date, it will pre-authorize an amount, for example $15, the first time the customer makes a purchase at that merchant.
Alternatively, merchants can opt for Cardis’ prepaid system. This involves the consumer setting up a prepaid account hosted by Cardis’ sponsoring bank that is topped up via ACH (automated clearing house) transfers. Using the Cardis prepaid account on a smartphone provides the digital equivalent to cash.
With its post-paid solution, merchants will save 30-50 percent per transaction compared to conventional card processing fees, while its prepaid solution saves merchants 80 percent per transaction. With the post-paid solution, it will only aggregate a customer’s purchases at a single specific merchant. But, as the prepaid solution aggregates the customer’s purchases across multiple merchants, this enables to offer a much lower processing fee to the merchant.
Cardis provides an audit trail enabling consumers to track individual transactions that are aggregated using its technology. Consumers don’t lose any of their card protection rights and guarantees by agreeing to let a merchant aggregate their payments through Cardis. They can always charge back any disputed transactions.
Cardis sees opportunities for digital content providers such as online music stores and games providers to use its aggregation technology. It can integrate solution with existing digital wallets.
Raiffeisen
In 2012, Austria’s Raiffeisen Bank launched a pilot of Cardis technology for NFC-based Visa V Pay debit card payments in partnership with Visa Europe. Raiffeisen’s MobileCard mobile payment product uses a secure element stored on an NFC-enabled MicroSD card inserted in a mobile phone. Although Cardis supports secure elements stored on SIM cards as well as on MicroSD cards and on the cloud, Raiffeisen opted for MicroSD cards, as this is an easier solution to implement.
Raiffeisen cardholders participating in the pilot use MobileCard on average three times a week, with an average transaction value of ($5.70). Merchants accepting MobileCard are seeing 40 percent to 70 percent lower merchant processing fees for an average transaction value of ($5.43) to ($13.60).
Spindle
In October 2013, Spindle, a U.S. mobile commerce company, signed an agreement with Multi-max, a manufacturer of vending machines for mid-size and small offices throughout North America, Europe and Asia. Spindle will integrate its MeNetwork mobile commerce technology into Multi-max’s line of K-Cup vending machines for rollout across the U.S.
The MeNetwork solution will incorporate all card-based payment acceptance services, as well as mobile marketing services. Spindle’s partner Cardis will provide low-value payment processing services for purchases at K-Cup vending machines.
Posted in Credit card Processing, Credit Card Security, Digital Wallet Privacy, e-commerce & m-commerce, Electronic Payments, Gift & Loyalty Card Processing, Internet Payment Gateway, Mobile Payments, Mobile Point of Sale, Near Field Communication, Payment Card Industry PCI Security, Smartphone, smartSD Cards, Visa MasterCard American Express Tagged with: accept, ach, aggregated, aggregation, aggregator, authorization, automated clearing house, average transaction, batched, card payments, card processing infrastructure, card processing systems, card-based payment acceptance, cardholders, clearing, contactless, contactless payments, cost-per-transaction, credit card transaction, debit card payments, Digital wallets, high processing charges, low-value payments, merchant aggregate, Merchant's, microSD, mobile app, mobile commerce, mobile payment, Mobile Payments, mobile site, mobile wallet transactions, nfc-based, payment service providers, pre-authorize, prepaid, processed, Processing, processing cost, processing fees, processor, settlement, smartphone, transactions, transfers
March 17th, 2014 by Elma Jane
Young people and Londoners are leading the way in adopting cashless payments in the U.K., The U.K.-based market research firm also found that non-bank electronic payment methods such as PayPal are trusted more than contactless and mobile card payments.
According to research, 38 percent of British people are interested in being able to make mobile payments and an enthusiastic 8 percent claim they would apply for mobile payment services straight away. Eighteen percent of U.K. Internet users say they would prefer to be able to stop using cash altogether.
Support for a cashless society is strongest in London, with 30 percent prepared to stop using cash. And it is the nation’s youth who are leading the way in new payment forms. Twenty-two percent of those aged 25 to 34 have used Barclays’ Pingit peer-to-peer mobile payment system, compared to 5 percent of those aged 45-54. About 17 percent of 25- to 34-year-olds have used the virtual currency Bitcoin at least once.
However, consumers are more concerned about the security of mobile payments than card payments. Sixty-five percent of consumers showed some concern about mobile payment security and 61 percent showed some concern about contactless cards, compared with 34 percent who were concerned about using debit cards and the 33 percent who were concerned about credit cards.
Consumers were notably less concerned about using non-bank payment services such as PayPal, which protect users’ financial data from being seen by third parties. Only 27 percent of Internet users are concerned about using non-bank payment services such as PayPal.
Posted in Credit card Processing, Credit Card Security, Digital Wallet Privacy, Electronic Payments, EMV EuroPay MasterCard Visa, Mobile Payments, Mobile Point of Sale, Near Field Communication, Smartphone Tagged with: card payments, cashless payments, cashless society, contactless, contactless cards, credit cards, debit cards, electronic payment methods, financial data, internet users, mobile card payments, mobile payment security, mobile payment services, non-bank, non-bank payment services, peer-to-peer mobile payment system, Security, Virtual Currency
January 3rd, 2014 by Elma Jane
Results of a new survey on overall mobile use by consumers has several ramifications for payments using mobile devices. The report, from global management consultancy Deloitte, found the number of consumers who said their device is NFC-equipped more than doubled from 2012 to 2013. More importantly perhaps, for a technology many observers have pronounced dead and buried, of those whose devices are equipped with NFC technology, more than one-third said they have made a contactless payment using their phone in the past month.
The report also found that the number of app downloads decreased 13 percent this year in the U.S. and even more in other countries. Per-app spending also decreased during the year, but the report’s authors still believe the outlook for apps is positive.
The good news is, we see a lot of potential remaining in the apps market space over the long term. We believe that the overall declines indicated in this year’s survey may be due to increasing sophistication among consumers. It is likely that they have already obtained the core apps they prefer for work and play, with those choices persisting over time as they upgrade and change their devices said Craig Wigginton, vice chairman and U.S. telecommunications sector leader for Deloitte.
Posted in Credit card Processing, Electronic Payments, Environmentally Green, Mobile Payments, Near Field Communication, Smartphone Tagged with: apps, contactless, devices, equipped, mobile, nfc, outlook, payments, Per-app, phone, report, technology, upgrade
November 19th, 2013 by Elma Jane
ISIS Electronic Wallet
Available Nationwide Isis Mobile Wallet
Latest version of the Isis Mobile Wallet has been announced. This is now available to consumers for download in the Google Play app store and at thousands of AT&T, T-Mobile and Verizon Wireless retail stores nationwide. Isis Mobile Wallet allows customers to pay at contactless payment terminals, and to save money through special offers and loyalty cards at participating merchants – all from their Isis Ready smartphone.
Today’s Isis Mobile Wallet nationwide launch is a milestone for consumers, merchants and banks. It’s the start of a smarter way to pay.
Together with Isis partners, a seamless mobile commerce experience have been built. Isis pleased to bring the magic and simplicity of the Isis Mobile Wallet to consumers across the U.S.
The redesigned Isis Mobile Wallet features a simplified user interface with a clean, white background and easy-to-navigate toolbars. Starting today, customers with one of the more than 40 Isis Ready smartphones available from AT&T, T-Mobile or Verizon Wireless can receive a free enhanced SIM card from their wireless carrier and download the Isis Mobile Wallet for free from Google Play. Integration with American Express Serve makes it convenient for Isis Mobile Wallet users to load funds to their American Express Serve Account from a U.S. debit or credit card, bank account, or through direct deposit, as well as pay bills online and send money to friends and family using an American Express Serve Account.
Posted in Digital Wallet Privacy, Electronic Payments, Mobile Payments, Near Field Communication, Smartphone, Visa MasterCard American Express Tagged with: American Express, AT&T, banks, bills, carrier, contactless, debit or credit, google, interface, ISIS, loyalty cards, Merchant's, mobile wallet, online, payment terminal, play app, smartphone, T-Mobile, Verizon, wireless
November 7th, 2013 by Elma Jane
Android 4.4 introduces an additional method of card emulation that does not involve a secure element, called host-based card emulation. This allows any Android application to emulate a card and talk directly to the NFC reader. This document describes how host-based card emulation (HCE) works on Android and how you can develop an app that emulates an NFC card using this technique.
Many Android-powered devices that offer NFC functionality already support NFC card emulation. In most cases, the card is emulated by a separate chip in the device, called a secure element. Many SIM cards provided by wireless carriers also contain a secure element.
Card Emulation with a Secure Element
The secure element itself performs the communication with the NFC terminal, and no Android application is involved in the transaction at all. After the transaction is complete, an Android application can query the secure element directly for the transaction status and notify the user.
When NFC card emulation is provided using a secure element, the card to be emulated is provisioned into the secure element on the device through an Android application. Then, when the user holds the device over an NFC terminal, the NFC controller in the device routes all data from the reader directly to the secure element.
Host-based Card Emulation
The NFC standards offer support for many different protocols, and there are different types of cards that can be emulated. When an NFC card is emulated using host-based card emulation, the data is routed to the host CPU on which Android applications are running directly, instead of routing the NFC protocol frames to a secure element.
Android 4.4 supports several protocols that are common in the market today. Many existing contactless cards are already based on these protocols, such as contactless payment cards. These protocols are also supported by many NFC readers in the market today, including Android NFC devices functioning as readers themselves. This allows you to build and deploy an end-to-end NFC solution around HCE using only Android-powered devices.
Posted in Electronic Payments, Mobile Payments, Near Field Communication, Smartphone Tagged with: 4.4, Android, app, card, cards, communication, contactless, controller, cpu, data, emulation, HCE, host, nfc, notify, payments, protocols, query, reader, routes, secure element, sim, status, terminal
October 29th, 2013 by Elma Jane
In addition to my article about Credit Card Purchases give way to Tap and Go.
I would like to add an example of contactless payments which was introduced in 1997 called Speedpass.
Speedpass is a keychain RFID (Radio Frequency Identification Device) introduced in 1997 by Mobil Oil Corp. (which merged with Exxon to become ExxonMobil in 1999) for electronic payment. It was originally developed byVerifone. As of 2004, more than seven million people possess Speedpass tags, which can be used at approximately 10,000 Exxon, Mobil and Esso gas stations worldwide. Speedpass has also been previously available through a Speedpass Car Tag and Speedpass-enabled Timex watch.
Speedpass is another example of “contactless” payment system that provides members with a quick and easy way to pay for purchases at participating Exxon and Mobil stations nation-wide. Speedpass is similar to the electronic toll technology successfully used on subway, bus, and highway systems around the world.
Speedpass key tag has a built-in chip and radio frequency antenna that allows it to communicate with Speedpass readers at gasoline pumps, convenience store terminals, and car wash kiosks at Exxon and Mobil locations.
A quick wave of your Speedpass key tag in front of the reader initiates the automatic transmission of a unique identification and security code to the Speedpass payment system so your account can be located. Your payment is instantly processed using the credit/debit card that is linked to your Speedpass. If the transaction is approved, you will receive a payment confirmation and you can be quickly on your way.
You can securely access your Speedpass account and change the credit/debit card that is linked to your device. You can also specify whether or not you would like to receive a receipt for gasoline purchases made at the pump using your Speedpass. Even if you change your receipt settings to specify that you don’t want a printed receipt, you can always view your complete Speedpass transaction history and all electronic receipts online by logging into your account at any time.
Speedpass is safe and secure. Your card information, preferences, and personal details are not stored in your Speedpass device, so your information is protected from unauthorized use.
Speedpass is a cool payment method for people on the go! You can use your Speedpass to pay for gasoline, food, merchandise, and car washes at participating Exxon and Mobil locations nation-wide.
Speedpass Benefits:
Fast and Convenient
Simply wave your Speedpass key tag across the area of the gasoline pump, convenience store terminal, or car wash kiosk that says “Place Speedpass Here”.
Free
There are no fees to acquire or use Speedpass key tags.
Easy and Simple
When you use Speedpass, there is no need to sign a receipt.
Online Account Access
If you are an existing Speedpass member, you can login to speedpass.com to access your account 24/7. You can review your purchase history, access electronic receipts, update your contact information, change the credit/debit card that is linked to your device, and more! If you are an existing member, but don’t yet have a username and password, setup your online profile today by clicking on the My Account button on this site.
Safe and Secure
Your credit/debit card number and personal information are not stored in
your Speedpass device.
Posted in Electronic Payments, Mobile Point of Sale, Near Field Communication Tagged with: antenna, built-in-chip, communicate, confirmation, contactless, convenience store, credit card purchases, electronic, electronic toll, exxon, fees, keychain, kiosks, locations, logging into, merchandise, mobil oil corp, nation-wide, online, payments, radio frequency identification device, receipts, RFID, security code, speedpass, Tags, tap and go, terminals, timex, transaction, unauthorized, verifone, watch, wave
October 28th, 2013 by Elma Jane
With banks and shops starting to let customers pay by tapping their smart phones on terminals in stores, the future of plastic credit cards is looking shaky.
MasterCard, which has teamed with Coles and CommBank on these ventures, yesterday said Australians were rapidly embracing contactless payments using PayPass and rival Visa’s payWave. At Coles, six out of 10 MasterCard and Visa payments were contactless.
MasterCard head of market development and innovation for Australasia said three out of 10 MasterCard terminal payments were contactless and there were now more than 175,000 terminals nationwide that could accept them. More than 10 million MasterCards in Australia could make contactless payments.
An EMV (Europay, MasterCard and Visa) standard meant all terminals were capable of handling different brands of contactless payments.
The first stage of the contactless payments or “tap and go” revolution began with Visa payWave and MasterCard PayPass in Australia and the first institution to make contactless payments available locally was the Commonwealth Bank in 2006.
The next stage is to use smartphones rather than just plastic cards for contactless payments. Customers still use their Visa and MasterCard accounts, but the transaction is effected using a Near Field Communication sticker placed on the back of the phone, or an embedded, secure NFC element inside modern Android smartphones.
In Europe, NFC-enabled watches, wristbands, key rings and fobs also were being used for contactless payments and there was no reason this couldn’t happen here.
Visa said it had made a “significant investment” in a mobile NFC ecosystem.
“Visa is working closely with partners like Samsung, Vodafone and Optus on a range of mobile payment solutions that use the secure element and prepaid SIM models.”
CommBank, which previously enabled contactless payments from an iPhone housed in a special case, last week said it would let customers pay directly from their Apple phone using an NFC sticker, and from newer Android phones with embedded secure NFC technology.
The new facility, to be rolled out in the current financial year, is part of a revamp of the bank’s smartphones apps.
Coles said contactless payments had increased in the past year by more than 70 per cent while CommBank’s volume of contactless payments had increased six fold in 12 months. Westpac said it was piloting an Android mobile contactless payment application and was also investigating smartwatch payments.
“We also believe that the next big trend after the rise of mobiles and NFC in Australia will be mobile checkouts, where shoppers purchase products and have them delivered within two or three clicks,” a spokeswoman said, and the moves were “as big a market shift as we’ve ever seen”.
Coles also announced a trial of its own contactless payments technology using NFC stickers. Funds would be drawn from Coles Rewards MasterCards. Some 5000 mobile phone tags would be issued in a trial.
ANZ said it was continuing its trial of a mobile wallet for Android phones begun last year, ahead of making the solution available to customers.
“Our NFC pilot with Samsung and Optus is tracking well and we’re also investigating other payment options such as QR codes,” an ANZ spokesman said.
“Given the fragmentation of the market, we will continue to monitor developments before finalising how we will bring a viable mobile wallet solution for our customers to market.”
St George Bank chief information officer said his bank planned to have a contactless phone payments solution in the market “sometime in 2014”.
The bank has previously been reported to be looking at payments via the Pebble and Samsung smart watches.
National Australia Bank, which unveiled its peer-to-peer payments app, NAB Flik, last month, said it was watching how the contactless payments market developed with “less focus on being first to market and more focus on being best in market.”
The Australian reported last month that Apple and PayPal were exploring an alternative to NFC-enabled contactless payments called iBeacons. When you pass close to a store in a shopping centre, a beacon will detect your phone’s presence and automatically alert you to signature items for sale and specials, or offer other information to lure you inside, and process payments.
CommBank last week told The Australian it was looking at iBeacons technology.
Posted in Credit card Processing, Electronic Payments, EMV EuroPay MasterCard Visa, Near Field Communication, Visa MasterCard American Express Tagged with: accounts, Android, banks, checkouts, contactless, embedded, EMV, EuroPay, fobs, Iphone, MasterCard, mobile, mobile wallet, Near Field Communication, nfc, optus, payments, paypass, paywave, phone, plastic credit cards, prepaid, process payments, qr codes, Samsung, secure, shops, sim, smart phones, Smartphones, smartwatch, sticker, store's, Tags, tap and go, tapping, terminal, terminals, transaction, visa's, vodafone
October 21st, 2013 by Elma Jane
Good time for merchants to start noting how their provider is handling card company fee changes as well as any future rate and fee changes, especially if your contract will expire in 2014.
October 2013 Rate and Fee Increase Notices
Visa, MasterCard, and Discover Credit card companies generally make rate and fee changes in the April and October time frame, although they have also made changes at other times of the year. Inevitably, some banks and merchant account providers seem to take advantage of the card company changes by increasing or adding their own mark-ups and by pointing too much of the blame at the card companies for the increases. This time around isn’t much different than others and merchants have sent me some rate and fee increase notices that go well beyond any card company changes.
In understanding how your provider is handling the latest card company changes, keep in mind that there are two important changes for October 2013:
Discover introduced a .25 cent increase to all transactions.
MasterCard introduced a .25 cent increase to certain transactions.
Below are two examples of recent notices on the October changes. Understanding the above .25 cent changes, how would you rate these providers?
Notice 1: 0.02 Percent + $0.02 Increase
“MasterCard, Visa and Discover typically evaluate the Interchange rates and fees twice per year most often in April and October. Based on recent changes as well as analysis from other network providers and vendors, the following changes to your merchant account are being implemented and will be reflected in your merchant statements for transactions processed beginning in October:
Interchange Plus Merchants: Percentage charged in excess of Interchange will increase by 2/100ths of a percent; and
Transactions Fees for all authorized transactions will increase by $0.02/transaction.”
Tiered Pricing Merchants: Qualified Rate for Visa, MasterCard and Discover will increase 2/100th of a percent;
Notice 2: 0.40 Percent Increase
“Effective October 1, 2013, the discount rates charged for your Visa, MasterCard, and Discover (as applicable) credit card and non-PIN (signature) debit card transactions will increase by 0.400%. We have increased these charges based on a variety of factors, including recent Card Organization changes and our own pricing considerations. This change will appear beginning with your October month-end statement you will receive in November.”
Your Statements Now go back to the statements you received in August and September or any notices you received via mail and read the notice your provider posted for these changes. Did the provider announce the actual change or did it state something quite differently? If it’s the latter, make sure it adjusts pricing accordingly. Also, make sure you monitor your rates, fees, and notices going forward to determine the best long-term course of action. If the provider needs you to extend your contract to correct its overcharges, then there are probably bigger pricing issues and more assertive action required by you to investigate your overall processing cost.
EMV Capable Terminals
To reduce fraud in the U.S., the card companies are introducing cards that have a chip as well as the current magnetic strip. Chip cards are prevalent outside the U.S. and EMV — Europay, MasterCard, and Visa — established the technical standards for processing them.
Brick-and-mortar merchants should understand about EMV.
Brick-and-mortar merchants should have equipment capable of processing EMV chip card transactions by October 2015 as certain fraud liability will shift from the bank that issued the card to the merchant. The equipment may be a terminal or a chip card reader attached to the terminal or POS system.
Certain credit card transactions will require a PIN number instead of a signature similar to PIN debit transactions today. Also, like the current PIN debit devices, each chip reader will need to be encrypted and the encryption code is processor specific. Therefore, if a merchant has an encrypted device, changing processors may be more costly as the encryption cannot simply be downloaded over the phone or Internet as is done with terminal reprogramming now. Instead, the encrypted device will need to go back to the provider for encryption or swapped with an encrypted device or a new encrypted device may be needed.
“EMV capable” can mean very little. In fact, if you have purchased or leased an “EMV capable” terminal it may simply mean that it has the slot or contactless connection to place the chip card and the terminal may have the capability to eventually be encrypted to actually process chip cards. However, the cost and time required to do so could be prohibited.
However, merchants should be planning to have equipment capable of processing chip card by October 2015. In fact, they should be planning to have the equipment capable of processing chip cards well ahead of the October 2015 — perhaps as early as late 2014, to ensure receiving it in time.
If a merchant’s existing terminal fails or is no longer supported, the merchant should inquire about EMV terminals as a replacement. However, ask if it comes fully encrypted and capable of actually processing an EMV transaction or if it will need the encryption later. Right now, the answer is likely that the terminal will need encryption later. If so, the merchant should obtain the time frame, process, and cost for enabling the terminal to actually process chip cards. This should be in writing. Remember, new terminals cost the provider around $150 to $250 and the encryption may be an extra $25 to $50.
Make sure you are comfortable with your provider and have negotiated the best processing cost before changing to encrypted EMV equipment.
Merchants do not need EMV terminals today and very few providers actually have terminals that can process an EMV chip card transaction right now.
Posted in Credit card Processing, Electronic Payments, EMV EuroPay MasterCard Visa, Visa MasterCard American Express Tagged with: authorized, banks, chip card, contactless, cost, credit-card, debit, devices, Discover, EMV, encrypted, fee, increase, interchange, MasterCard, merchant account providers, network, overcharges, percent, percentage, PIN, POS, pricing, processor, prohibited, rate, rate and fee, statements, terminal, transactions, visa
