Customer Transactions

How does my customer indicate his choice and also, does he have to indicate credit or debit, or does the terminal know based on the card?

Posted On: March 21st 2011

It depends on what is on the card. If there is both a debit and credit product on the Chip card then the issuer will either set a preferred order or give this option to the customer via the terminal (when possible).

In the Canadian market, the card knows which type of transaction it supports; therefore, the customer does not need to make a selection. In some cases, particularly in the future, some cards can be designed to support both debit and credit transaction and might require customer confirmation. The best solution is to be prepared for both.

Known as Application Selection, the card accepting chip enable device determines the card application to use for payment. The chip card supplies application information to terminal and the terminal builds a list of applications which are common to both the card and terminal. A default payment application will be selected or the cardholder will be prompted to select a payment application supported by the terminal.

How will we process returns when the payment was from a chip card?

Posted On: March 21st 2011

Refund is exactly the same when with Magstripe.

The process will be very similar to today. If you needed to swipe the card with mag-stripe cards, you will need to insert the chip card. Voids and returns with just the account number will also work the same as before.

As a card accepting merchant, merchandise refunds and returns should work the same as in the magnetic stripe world.


How do consumers select or change their pins and what happens if they can’t remember this at the POS?

Posted On: March 21st 2011

This depends on the issuer. Issuers can choose to give the consumer a static PIN or allow the consumer to change PIN at desk or in a branch ATM. When a consumer forgets its PIN than that Consumer will not be able to make a transaction. If it would be, then that would mean that PIN is useless and fraudulent people could always fallback to signature!

This process is highly dependent on the issuing banks' processes. Some banks require you to setup your PIN in one of their branches while some banks will allows you to change your PIN online to over the phone (IVR). In the Canadian market, some banks allowed transactions to be approved with signature even if the customer did not know their PIN. If the customer gets declined, you would refer them to their bank same as before.

Based on their Issuing Bank policies, consumers who have chip cards may be able to change their associated PIN(s) either at the point-of sales device, designated devices (kiosks), online, via VRU – voice response unit, or direct interaction with Issuing bank customer service department. If the consumer can not remember their chip associated PIN(s) at the time of purchase, the merchant may have to use fall back (signature, floor limits or other customer verification method) to complete the transaction process.

PIN change and selection is handled through the card issuer usually at a branch or ATM. A customer who forgets a PIN will be unable to complete a transaction at a chip enabled merchant or ATM.

Will the icons on chip readers make it easier for customers to decide how to swipe their cards, because they certainly can’t figure out the direction for the magnetic stripe!

Posted On: March 21st 2011

With Chip, customers don't swipe but dip. This is done face down, chip to consumer! There are icons on the terminal that clearly show how to dip your card. If you dip it wrong it does not work and you need to try different.

For chip, a standard seems to have been adopted. In the Canadian market, all chips are inserted "Chip up". Mag-stripe swipe directions seem to differ based on the make and model of terminals which definitely didn't help in the past.

The card accepting device should have instructional prompts and signage to support cardholders through each phase of the transaction. It will also be of benefit for all register personnel be fully educated and trained on point of sale chip card acceptance processes and creation of a brief cashier / cardholder instruction guide might help ease the transition to chip.

The chip itself will help because it is inserted at the end to which the chip interface plate is closest. Merchant staff have a role to play in this as well. In many Canadian retailers, the staff are inserting the card into the chip-enabled terminal on behalf of the customer to complete the transaction.

Can my customers sign their receipts if they can’t remember their PIN?

Posted On: March 21st 2011

This depends on the CVM list for Offline PIN. Again this is set by the Issuer. But the real power of PIN is that you allow for another strong authentication method. If you are able to bypass PIN than your card is just as weak as signature only card.

Depending on how the card and issuing bank is setup, they might be able to. If the transaction is still approved by the issuing bank and the receipt is printed with a signature panel then yes, however, if the transaction is declined, the customer will not be able to sign in lieu.

As a card accepting merchant, you could process this cardholder transaction using alternative CVM (card verification method) of signature if allowed by the card parameters or floor limit parameters. There could be liability shift consequences for the merchant.

That is a matter for the card scheme rules. In Canada, that would not be possible for a chip card being used at a chip-enabled merchant.