Chipping Up! Why Your Small Business Needs to Be Using a Chip-and-PIN Reader

It’s a beautiful Saturday morning in Paris. You just devoured some delicious pistachio macaroons and a cappuccino when you ask the waiter for the check. He returns to your table seconds later with a small machine, takes your credit card, inserts it chip first into the machine, and then asks you to enter your PIN discretely on the mobile device. Voila! No muss, no fuss, no waiting. You didn’t even have to leave the table.

That simple and convenient device is called a Chip-and-PIN reader. It’s been an industry standard outside of the US for quite some time now, but has quickly become the new way for US-based retail shops and restaurants to run credit/debit card payments safely, securely, and efficiently.

What is a Chip-and-PIN reader?

Technically called an “EMV” (which stands for Europay, MasterCard, and Visa), it’s a more secure upgrade to the standard magnetic card reader for retail shops and businesses worldwide. Gone are the days of the standard USB card swiper. As a small business owner you will have noticed that newly issued credit cards now have microprocessor chips built inside. This new technology makes it more difficult for thieves to steal account information. Up until now, standard credit cards stored card data on a magnetic strip on the back of the card. When a store swipes a customer’s credit card during the checkout process, the card terminal reads the information from that strip. The information on the strip is static, meaning the data is constant for every transaction — which makes it very easy for pesky fraudsters to hack the terminal or network, steal the card data, and use it elsewhere. However, the microprocessor chip on an EMV card generates a unique code for every transaction. Even if a criminal manages to grab the code from the store, it’s useless because it won’t work a second time and it can’t be traced back to the card itself.

Why should I upgrade my business to an EMV reader?

Previously, credit card companies took responsibility for fraudulent purchases, however, according to new regulations in the US, small business owners and retail shops who don’t accept EMV payments will be responsible for the costs of what’s called “counterfeit fraud”, a type of credit card fraud based on stealing credit card numbers (by hacking a checkout terminal, for example) and using the stolen data to make copies of the victim’s card. Not only does upgrading to an EMV reader almost eliminate these risks, but credit card companies will still accept liability for counterfeit fraud if the fraud stems from an EMV reader. According to Visa Inc., “the party that has made an investment in EMV deployment is protected from financial liability for card-present counterfeit fraud losses on this date.” In other words, the credit card companies have decided that magnetic strip transactions are so vulnerable to counterfeit fraud that they don’t want to be responsible for that liability anymore. They believe EMV payment processing is so secure, and that the risks are so low for fraud, that they are willing to continue to accept liability if the retail shop is using an EMV reader.

What if I already have a point-of-sale system with a built-in card swiper?

If your old point-of-sale system isn’t setup to accept chipped cards, and there’s no way to integrate a Chip-and-PIN, you’ll definitely want to upgrade your system. That is probably a lot easier than you think. Because a Chip-and-PIN EMV reader is mobile, you can likely use it as an external payment device with your current point-of-sale system. Many point-of-sale systems require you to use their integrated merchant services provider. In such cases, you’ll want to speak directly with your merchant services provider and also the POS company that designed your system to see how to integrate an EMV reader into your current setup. Another option is to upgrade your point-of-sale system altogether. Look into point-of-sale systems that give you the freedom and flexibility to choose any merchant services provider of your choice. Ask whether or not the new system is platform agnostic. If it is, that will mean that any current hardware (such as a receipt printer and cash drawer) you own will likely work and you won’t have to invest in new peripherals.

Peace of mind!

As if owners of small businesses and retail shops don’t have enough to worry about, adding counterfeit credit card charges to the mix is just one more thing to make you lose your mind. A simple EMV reader will bring peace of mind to every business owner across the country. Making sure your shop is upgraded with the latest Chip-and-PIN technology, possibly preventing a financial disaster, is a no-brainer. You can check out this helpful infographic from Visa Inc. for more information. Also, speak with your POS company and your merchant services provider and find out how upgrading to this safer, more secure payment processing system is right for your business.