Business Concerns

What do we need to know about fraud migration? We have our own card. Should we be concerned?

Posted On: March 21st 2011

As the world is migrating to EMV, we see a move of fraud to countries that have yet implemented to EMV as this is the easiest thing for fraudsters. The US alone has indicated that it has risen to 6.4 billion dollars of fraud in the last few years (after the introduction of EMV in other countries). Furthermore, other countries that have implemented EMV are now gearing up to resist card payments in countries without EMV. This is because financial institutions in these countries see most of their EMV cards being used in non EMV countries in order to bypass the chip and conduct fraudulent transactions with the magstripe.

Without a liability shift merchants will not be pushed to EMV. However, Switches and issuers do see a great benefit (fraud) from implementing EMV technology.

European and Canadian conversions have shown a decline in counterfeit fraud, but shows an increase in card-not-present fraud and non-receipt fraud. In general, fraud as a whole has not increased, therefore, depending on your strategies; there shouldn't be much change when looking at the big picture.

Due to the current fraud losses, Issuers probably have the biggest need to migrate to EMV. However, with a liability shift, the losses would transfer over to non-EMV enabled card accepting merchants which would present as big a need for the merchant stakeholders.

Be concerned. The Canadian business case for chip deployment was largely based on exporting our serious credit and debit card fraud problem to the US. Fraud migrates to the easiest point of exploitation almost instantly. When you are that point, you will get hit hard and fast by organized crime rings. Having your own cards may limit where the exploitation can occur (i.e. your own stores) but that does not protect you from a concentrated attack. It may make you a less attractive fraud target initially. Be especially concerned about offering cash back or the sale of highly fungible (easily liquidated for cash) items like jewelry or electronics, lottery tickets, phone cards, etc.

My terminal uses my telephone line to process transactions. Does anything change with the introduction of chip cards?

Posted On: March 21st 2011

No. You only need a new terminal that accepts Chip.

That will depend on the type of POS or PIN Pad you will acquire, so check the specs. There will however, definitely be an increase in data volume being passed during transactions and dial-up lines will slow those down.

Speed of the chip transaction may be nominally slower and consideration to higher dial-up or internet connection for transaction processing could be considered. If this is an unattended or customer activated device, the terminal should have instructional prompts and signage to support cardholders through each phase of the transaction.

Lots changes, but I think the phone line isn't one of them. It will still be your link to the card issuer/authentication.

We take cash payment across the counter but would like to accept credit and debit cards, but we’re not sure how to handle the need for PINs.

Posted On: March 21st 2011

Like magstripe you need a payment processor and a terminal that is able to accept EMV transactions.

In order to accept debit and credit cards you will need to acquire a POS terminal with a PIN Pad attachment. Please contact your acquiring/merchant bank for more information.

Your payment brand or payment group organization would be able to guide you to appropriate point-of- sale service providers who could offer solutions for your specific merchant environment.

You are no further behind other retailers in terms of the learning curve for handling the change to PIN. In fact, you have fewer established staff habits to unlearn and can deploy directly into a chip enabled environment. It may actually prove easier for you.

Can I use an EMV terminal for anything other than credit or debit payments? Can I use it for my loyalty scheme?

Posted On: March 21st 2011

Yes, but it depends on the capabilities of your terminal and processor. Please inform your processor if you they (and your terminal) has capabilities to process loyalty.

In theory yes, but it will need to be customized to your loyalty program's specifications.

Yes...there are methods of enabling your EMV acceptance device for applications beyond the payment schemes. Your point-of –sale service provider can advise on which of these additional functions are currently supported by their system or the cost and timeframe to implement your required application/scheme.

Probably, at a cost. That is a value-added opportunity for your acquirer to provide for you.

Will merchants benefit from the move to chip cards?

Posted On: March 21st 2011

Watch here as this question gets answered.

We only take credit. If we have to invest in pinpads, should we also take debit?

Posted On: March 21st 2011

 Watch here as this question gets answered.

How will floor limits be determined under EMV? Could there be conflicts between the cards and terminals?

Posted On: March 21st 2011

 Watch here as this question gets answered.