First implemented in Europe, chip and PIN credit cards are widely used in Canada. With the looming deadline of October 2010, Canadian merchants must ensure that they are prepared to adopt chip and PIN technology. After October 2010, merchants who are not chip and PIN compliant risk being liable for any fraudulent charges made against them.

Here are some things to consider when upgrading to chip and PIN technology.

Software and hardware upgrades

In order to accept payments using chip and PIN technology, merchants must upgrade to chip and PIN certified hardware. Terminals must have chip and PIN readers and follow PCI standards.

Typically, merchants face few software issues when migrating to chip and PIN. Ask your POS vendor if the current version of their software that you use is certified for chip and PIN transactions. If your POS provider is not PCI compliant, VersaPay offers an inexpensive solution called ECRi.

What is ECRi?

ECRi (Electronic Cash Register interface) technology allows merchants to offload PCI compliance responsibilities to their provider. By setting up a PCI compliant payment terminal with ECRi, VersaPay allows merchants to process payments without sending sensitive customer account data through the POS system. This cost-effective integration reduces merchants’ transaction fees and eliminates the headaches associated with becoming PCI compliant.

How much does it cost to switch to chip and PIN?

The … Read more

Consumers respond positively to using a chip-enabled credit card terminal. This is due to faster transactions, enhanced security and increased control.

Faster transactions

Speed and convenience play a prominent role in creating a great customer experience. When customers use a chip and PIN credit card to complete a transaction, they’re no longer required to sign a receipt. Instead, customers enter a unique PIN at the credit card terminal. This speeds up transactions by two to four seconds.

Enhanced security

With an embedded chip that is virtually impossible to copy and a PIN that is used for cardholder verification, chip and PIN technology provides you and your customers with enhanced protection against fraud. Research shows that since chip and PIN adoption in 2004, fraud related to lost and stolen payment cards decreased by over 50% in the U.K. Your customers will feel better knowing their purchases are conducted using the most secure transaction methods possible.

Increased control

With increasing security being valued by most consumers, you can now provide them with the added piece of mind that their credit card never has to leave their hands during a transaction. Customers can personally insert their card into the credit card terminal and enter their PIN, allowing the card to … Read more

What is EMV?

EMV is the standard that allows chip and PIN cards to operate with chip-enabled terminals and ATMs.

EMVCo is a public company that manages, maintains and enhances EMV Integrated Circuit Card Specifications Standards.

• In 1999, EMVCo was founded by Europay International SA, Mastercard and VISA.
• In 2002, Europay International SA was absorbed into Mastercard.
• In 2004, JCB (formerly Japan credit Bureau) joined the organization.
• In 2009, American Express joined the organization.

EMVCo’s main activities are to:

• Ensure the compatibility and acceptance of chip cards globally.
• Develop an internationally recognized standard for chip-based payment processing.
• Test and approve processes that evaluate compliance with EMV standards.

How do EMV standards affect my business?

The introduction of EMV standards brings many changes that affect merchants around the world.

• EMV standards improve the customer experience. Customer information is protected by cryptographic algorithms, providing improved security between chip cards and chip-reading terminals during transactions.
• EMV standards can save you money. Since these standards improve the security of transactions, transactions that follow EMV standards can be subject to lower payment processing fees.
• EMV standards reduce your liability for fraudulent activity from lost or stolen payment cards. Notably, as of 2010, merchants without EMV compliant devices are fully liable for the cost of credit
… Read more

What is chip and PIN technology?

Chip and PIN technology is a way of authenticating a cardholder’s identity. An embedded microchip contains the customer’s information, and a four-digit PIN is used to verify the customer’s identity. In order for the transaction to be approved, the PIN must match the information stored on the card.

Chip and PIN card systems are based on the EMV standard, developed by EMVCo LLC, whose founding members included Europay, MasterCard and Visa. These standards enforce the use of certified EMV compliant POS terminals. EMVCo LLC defines chip card and chip-reading terminal requirements by auditing and certifying merchants for EMV compliance.

How does chip and PIN technology affect your business?

Chip and PIN technology will affect your business in several major ways. It will:

• Require EMV compliant software and hardware.
• Increase transaction speeds.
• Increase customer confidence.
• Decrease fraudulent chargebacks.

Software and hardware

Some merchants are frustrated to discover that recently purchased POS terminals are not EMV compliant. Check your existing contract to see if you are EMV compliant. If you are not, determine whether you can upgrade to EMV compliant POS terminals without breaking your contract.

Speed

Chip and PIN technology speeds up transactions because customers don’t need to sign a receipt. Faster transactions mean … Read more

• Regulatory driven, by PCI DSS, and chip and PIN technology
• Consumer driven, by mobile technology and the entry of Visa Debit.

These changes present new challenges and opportunities for all card-accepting merchants and include:

• Regulatory driven changes
• Consumer driven changes
• PCI compliance
• Chip and PIN technology
• Mobile technology
• Visa debit

Over the next few articles, we’ll take a more detailed look at these industry changes. Today, we’ll talk about regulatory driven changes in the payment processing industry.

Regulatory driven changes

Payment Card Industry Data Security Standard (PCI DSS)

The biggest regulatory change to impact your business in 2010 is the introduction of the Payment Card Industry Data Security Standard (PCI DSS).

What is PCI DSS?

The PCI DSS is a set of 12 requirements that covers everything from developing a secure network to maintaining an information security policy.

How does PCI DSS affect your business?

First, you may have to change your current systems in order to meet PCI DSS standards. If your current payment processing system is up-to-date, you may only need a slight upgrade. If your system is old, it may be worth getting a new system. Contact your payment processor to determine which option is best for your business.

Second, you must document your security compliance. There are two categories of PCI DSS merchants. The amount of documentation required depends on which category you are in.

• Lower level merchants have up to
… Read more