With the shift to EMV chip technology, the credit card processing news has been awash with details of the latest payment system technology. The directive by Credit Card companies warning that if merchants had not made the switch to EMV capable systems by October 1, 2015, they would be liable for any fraud that occurred, as a result, has plagued merchants who are yet to make the change. This directive left merchants scrambling as trying to either comply or take the risk of shouldering the burden of credit card fraud. Since accepting cash only is out of the question due the low volume of sales, merchants have been forced to use credit card processors to smooth the way in transitioning to EMV. Else, to perform a cost-benefit analysis in cases where the merchant has been unable to comply due to financial constraints. However, the latter has been rather unsuccessful because of lack of credit card fraud reports that are crucial in performing an analysis.
Most credit card processor agrees that merchants who do not make the move to EMV are more likely to attract fraudsters and should the merchant fall prey to fraud, they face millions in liability. Due to the expected decrease in card present fraud and anticipation in an increase in card not present fraud, the credit card processing news have also been dominated by news of online fraud preventative measures. As a merchant, choosing the best credit card processor is imperative in securing your business and giving customers a great user experience in their transactions. What defines a great credit card processor? The card processing company should be able to offer you customized solutions targeted specifically at your small, medium or large business’s needs. It should give you leeway in deciding how to accept credit card, fit your budget’s requirements and also provide support and fraud preventative measures and systems in case you decide to take your business online. This will enable you to gain from your credit card processor and learn how to protect your business from online and new identity fraud expected to see a rise. New identity fraud refers to fraud where the fraudster creates a fake account online by using real information about a customer.
Apart from informative news, the credit card processing industry has also experienced controversies. The latest bulls to lock horns are Walmart and Visa. Walmart filed a suit accusing Visa of requiring the retailer to accept signature verification rather than PIN. According to USA Today, the retailer says that the method is not only insecure but is also advocated by Visa as a way of making more money in its payment processing procedures. While chip-and-pin exists and offer more security, it is possible to verify through signatures and swiping in cases where a retailer does not have an EMV capable payment processing system.
The auto dealership, mortgage bankers, and credit card companies are the main money lenders and they strictly evaluate one`s credit worthiness from the FICO and credit scores as reflected by the credit report. Landlords, employers, and Insurance companies also find it worth to rely on the credit scores in the determination of financial worth of creditors. Therefore, there is a strong need of maintaining a good credit in order to secure a mortgage or a loan for financial support. In order to maintain and acquire good credit score, you need to understand the following component and their impact on the FICO and credit scores.
Credit history contributes a rough estimate of 35% of the FICO or the credit score. The credit history determines whether on one can be trusted to repay any money with the speculated time. The scores are calculated from the herein considerations:
- Has the debtor paid all the bills on time? Timely repayment reflects positively while the late payment has an adverse effect on the FICO scores.
- Does the debtor have liens and judgment regarding the debt settlement? Bankruptcies, wage attachments, and charge-offs have significant influences on any individual`s credit history.
- In case one paid late, the credit scores figures reflect how late the repayment was made. The earlier the repayment the better the credit score and vise verse.
The amount of credit:
This is the second most determinant of credit scores. This is calculated by dividing the amount of debt owed by the amount of unutilized debt. The figure is very crucial in determining the trust of the borrower. This is a bit tricky since the financial credibility cannot be determined in case one does not owe any credit.
The scores are also determined by the type of accounts since the creditors might need to verify that the borrowers are stable enough to fully manage different credits. The more the accounts, such as the auto loans, mortgage, installment and credit cards the high the credit scores.
The credit history length
The reflect credit score on the credit report also takes the consideration of how long has one been using the credit. The average score of the all the account is used in the determination of the length of the credit history.
The longer the history (though not marred by late repayment) has a stronger positive impact on the credit scores than a short time history. A short history is only beneficial if the one has zero or minimal records of late payment.
The types of the credits and their repayment
The credits that have fixed due-date and fixed amount are weighed more in the calculation of the FICO score. These types of credit payments include the student loans, auto loans, and the mortgage payments. Violation of due dates on the above credits indicates financial hardship or carelessness and hence have a strong adverse effect on the credit score.
Therefore if you are using the magnetic credit stripe card you are very likely to affect your FICO score since the fraudster may borrow money using your account data. This is so since there accession of the holders account data is easier than the EMV card account detail. Magnetic card stripe information
To give a precise answer, I would not waste time to say no.
Don’t confuse the EMV compliance movement with the PCI DSS compliance. By accepting EMV does not, in any case, remove the necessity for PCI Compliance. The most imperative thing that you should understand is that EMV does not have a direct effect on any organization’s PCI compliance requirements. Therefore, the adjustment to the EMV doesn’t condense PCI`s scope and does not change any entity’s liability to be PCI compliant. Thus, the reason one can comfortably argue that all merchants have to adhere to the PCI Compliance requirements even after shifting to the EMV compliance. In a closure look, you will understand that the Compliance is not an either/or proposition. What do I mean by this? If you are a merchant, and you accept credit cards, it is of much benefit and mandatory for you to be both PCI compliant as well as EMV compliant.
What is the difference between the EMV and PCI compliance?
The PCI and EMV have different requirements as each protect some distinct aspects of cardholder data. The main purpose of the PCI Data Security Standards is to ensure that the card data is not stolen and is always secure to begin with. On the other end, the EMV assures that if at any case the credit card data gets into the hands of fraudster its content is rendered useless.
- EMV’s ensure global interoperability and security of chip-based payment cards.
- It prevents cards from any possibility of being duplicated. This is achieved through the use of its chip that produces a unique encrypted output at the different time the card used in a transaction. This is a measure to prevent card skimming.
- The EMV card compliance specifications are managed by the EMVCo LLC (Visa, Europay, and the MasterCard).
- There is the requirement of an EMV certification between EMV-capable hardware and the processor.
- It also ensures the protection of strong cardholder verification data (chip and pin, chip and signature).
- PCI’s main goal is to protect cardholder data since it is processed, stored and transmitted by the merchants hence protecting the consumer from business exploitation.
- The PCIs follows some common sense steps that reflect best practices in a two party transaction. This includes building and the maintenance of a secure network, regularly monitoring and testing networks maintenance of the vulnerability management program that protects cardholder`s data, and also maintaining an information security policy.
- The PCI specifications are managed by the PCI Security Standards Council. This was founded by the American Express, Discover, JCB International, MasterCard Worldwide and Visa Inc.
- The PCI also requires habitual vulnerability scanning by the Approved Scanning Vendor (ASV).
So the EMV is not an alternative for PCI compliance neither is it a PCI replacement. The PCI is not a catchall for EMV. The two works together to improve overall credit card security
As the U.S. continues to expand its nationwide migration to EMV chip technology, it is still a process that is a bit complicated to merchants and customers alike. What is EMV chip technology? What is required of merchants and customers in the switch to EMV chip technology? Allow us to walk you through the basics. EMV chip technology is one of the best payment technology used to protect against card fraud in offline transactions. In fact, it has been used around the world with France being the first to use it in 1992 and the U.S. being one of the last developed countries to implement it.
Remember the recent wave of data breaches and credit card fraud that swept country in 2014 that affected Target and other retailers? That increase in fraud cost merchants, financial institutions and credit card companies millions in terms of wasted time, resources and money and prompted credit card companies to accelerate their plan of rolling out the EMV chip technology. The EMV chip technology is a payment technology that was first developed by Europay, Mastercard and Visa and was later adopted by companies such as China Unionpay, Discover and American Express through the EMVco. It involves the use of microprocessor chips that are embedded on debit and credit cards.
Benefits of the EMV Chip Technology
With the rate of Credit card fraud having doubled in the last 7 years, the EMV chip technology is expected to reduce fraud by making it almost impossible to copy information or produce counterfeit cards hence reducing Card Present fraud. Secondly, we all need peace of mind. The technology provides this by improving security therefore protecting the customer and inspiring confidence to use credit cards without fear. It also enables the credit card company to program fraud prevention measures. For example, if you lose your card and report this, the company can use the EMV chip technology to disable the card and minimize losses. Finally, the technology secures cards to enable the addition of future value-added applications.
What the Switch Means For Merchants and Customers
Merchants and financial institutions will require switching their hardware and software to new payment processing systems. Indeed, those who have not yet invested in EMV compatible systems will be held liable for any card present fraud. Merchants who have already made the switch however are not held liable for card present fraud and instead, the company shoulders this responsibility. On the other hand, customers will be expected to activate the new chip cards they are issued with and familiarize themselves with the payment process.
Unfortunately, EMV does not affect internet, telephone and mail order transactions and therefore, card not present fraud is expected to increase. On overall however, they are a great start in the fight against credit card fraud.
EMV Chip Technology vs. Magnetic Strip Technology
Traditional cards feature a magnetic stripe which contains the numbers associated with your account. At the point of sale, these cards are swiped across a credit card reader which then generates a code that is sent through the system or network to authenticate the transaction. Unfortunately, the same number is generated for each transaction which makes it easy to forge or steal data in case a fraudster hacks into the system. That is why the traditional system is vulnerable due to its static nature. On the other hand, the EMV chip technology is dynamic and very safe to use. The microprocessor chip generates a unique code for each purchase making it almost impossible to hack account information during payment. Instead of swiping, however, a method touted as card dipping is used which involves the customer sticking the card into the slot and the leave it there to approve the transaction. Therefore, though someone could try and steal data, it is useless to them as they cannot use it for another transaction.
How about Chip-and-PIN cards?
In Chip-and-PIN cards, data is more secure as a pin is used instead of a signature which may be forged. However, these cards work on both swipe and slot and if the retailer is not EMV enabled, your data is just as vulnerable as that of a magstripe card. The new card readers support both processes, and once you swipe, you are directed to insert the EMV card into the slot. Unfortunately, most financial institutions have stuck to the Chip-and-Sign card which only requires a signature for authentication. You can take it upon yourself to request for PIN inclusion from your card company. Not only is it more secure, but also enables you to use your card abroad. Just ensure that you do not forget your PIN!
Best Practices When Using EMV Chip Technology
Using EMV should not make drop your guard. Merchants having been given an incentive; of the carrot and stick nature, where if they have already complied and switched to EMV capable systems, they are not liable in case of card present a fraud. And if not, they shoulder the responsibility. Sadly, some have opted to take their chances, unwittingly inviting fraudsters to take a shot. Being vigilant when it comes to your retailer’s payment processing is crucial. Also, monitor your statement to detect any charges that you did not authorize as the EMV chip cards do nothing for online and telephone (Card Not Present) fraud. Fraudsters have turned to this and can use your card number to make such purchases. While there are still some dissenting voices and skepticism as to the ability of the EMV chip cards to reduce Card Present fraud, it is unanimous that they give fraudsters fewer avenues of copying and stealing personal account information as well as succeeding in counterfeiting. Consequently, you as a customer or merchant stand to gain from using EMV chip technology.
The US federal Government wants to bring to the mainstream more citizens who are unbanked or underbanked. Both the FDIC and the US Dot have new plans to served and embrace individuals who are known as the financially underserved in mobile banking and mobile payments.
The treasury department’s fiscal services bureau, in April 2016, unveiled a mobile app for Direct Express. Direct Express employs and uses debit cards that are funded with federal payments and dispersions of benefits to an estimated 5.5 million recipients who will not or cannot use direct deposit.
Smart phone use of our customers is up 32% from 2013. Direct express was started in August, 2015, and as of late April 2016 over 100,000 DE cardholders were using the app. Better understanding and managing their accounts is the goal at this time notes Direct Express officials. A byproduct benefit now will be fewer calls to the Direct Express call center as users of the app can manage their accounts and may never need to speak to a Customer service rep again.
Payment sector to be pushed faster with Wearables likely leading the trend.
340 million wearables in the next few years worldwide will force payment processing to be aggressive in keeping up with the different ways to pay. Up from 22.7 million in 2014, 9 in 10 wearables will be watches. Watching this trend will be ongoing, as only about 12.5 % of wearables now are able to be used for payment.
This trend will only gain momentum and as a merchant you will need to be prepared and make sure you can get involved as soon as possible. The sooner you are able to process these mobile payments the faster your business will grow .
Credit Card Protection
Credit Card Protection What do Michaels, Marriott, Hilton, Target, the IRS, and Yahoo have in common? All of them suffered high profile technology break-ins where millions of people’s valuable information was stolen. Companies are under attack 24-7 from sources inside and outside the US. The goal of the break-ins is personal information. With personal information thieves can manufacture legitimate credit cards and steal billions of dollars, yes billions of dollars of merchandise.
Credit Card Protection
Protecting your business from these thieves right now is much easier than you can imagine. With the new credit card chip technologies that were mandated in October 2015, your banks were offering you the way to combat these stolen credit cards. But, unfortunately, only 39% of business have taken advantage of this new processing system. Swiping is now an unsupported dinosaur. If your business takes a fraudulent credit card, you have no recourse against the bank to recoup your funds. The only way you can protect your business is to implement, and use the new chip and dip procedures for credit card processing.
The machine which reads the credit cards after being swiped through them and enables the user or customer to make payments via the credit cards is called Credit Card Processing Machine. This money is connected to the merchant account and thus the payment is done. There are various types of machines which belong to this category. A few of them can read directly the account information and a few of them require manual input for processing the transaction. Other than this, it can be classified into various types.
Stationary Credit card Processing Machines
Stationary machines are the ones with fixed terminals that connect to the merchant account via the phone modems. A printer is attached to the machines which is used to print the details. These are very common in all standard retail shops. The process of making payment is completed after the machine or prior swipe connects to the merchant account and draws all the necessary information. The purpose of making the swipe is to read the information which is embedded in the magnetic strip which is present on the back side of the card.
Wireless Card Terminals
The machines of this type are always connected to the Merchant’s account. Active internet connection is required while the machine is on and as the name goes the connection is wireless. These machines are small in size and also implements portability. The businesses which require mobility can use these kind of machines.
Mobile Phone Credit Card Processing Machines
These processors are almost similar to the wireless card terminals when it comes to functioning. But in this case for connecting to the merchant’s account internet connection is obtained via cellular phones. This machine can be easily carried anywhere as it is very small in shape and requires less space.
These are not intangible that is they are basically hardware which are installed at the trading sites in order to serve the purpose of online payment. This is not a machine in a true sense and that is why the word virtual is coined here. But for availing the virtual credit card terminal internet connection is the most basic requirement.
Choosing the proper type
Thus we can see that options are plenty when it comes to choose the correct credit card processing machine. Another face of the coin is the service from the merchant service provider. The service should be flawless and the helplines should be always active to help. Standalone applications are also available in the market. There are various utilities of a better card processing machine. These functionalities are very helpful in exploiting the advantages given by a bank or financial institution issuing the credit card. Pre-authorization is an important feature which is accepted by various devices. Two other important aspects of any business (might be offline or online) are cancellation and refunds and are considered as integral parts of the service. The services are managed by a centralized server which looks after everything.
Cashless transactions have fastened the cycle of business and have made in much safer to do business around the globe. The dimensions have also expanded as a result and these credit card processing machines have played an important role in doing that.
Our generation is becoming more and more technologically advanced. Everything from writing, cooking, working out and even driving is becoming easier and efficient because of the serious technological advancement in all these sectors. Money has also in its own way joined this movement. Our great grandfathers were forced to walk with large sums of money for transactions as there was no other way of transporting it. This sometimes made them victims of robbery and the likes. Today we have the famous credit cards. These allow you to deposit any sum of money in them and practically be in a position to carry millions in a card and move around with it comfortably. If the card is stolen you simply need to block it and your money is safe and intact.
Credit cards can also be used to pay for services offered such as buying goods at a supermarket or paying for dinner after a night out. For this to be possible there is a credit card processing equipment that helps to ensure money is transferred from the buyer to the sellers account. This machine relies a lot on technology and the proper type ensures that transactions are done accurately, swiftly and securely.
There are different models of the credit card processing equipment including counter top, mobile and wireless. The type of equipment used differs according to the specific needs of the consumer. All three have different qualities and features. Overall when used by businesses they can help in reducing the costs and increasing your profits. They reduce costs as they are a service that is installed in a windows PC and the software does the job perfectly without having to hire any other costly services.Any business looking to use these machines should select the best fit for them with a PIN pad for operation as well.
Traditional counter top machine.
This equipment is basically used to swipe a customer’s card and the rest of the heavy work is automatically done. It can read credit cards, debit cards, prepaid cards and electronic benefits transfers. These are mainly used in environments where card transactions are the norm if they are to give maximum returns.
Wireless credit card machines.
The main advantage of this machine is that it allows you do accept any transaction no matter where you are. This especially works for those who happen to do business in areas that do not have good or any internet connections.
This involves businesses at outdoor events, kiosks, open markets, food carts, customer’s homes or any other place. It helps to increase your number of customer’s, it is flexible and best of all saves time. They are compact, light and no phone lines are needed meaning the savings are done directly.
Mobile credit card machines are as their name suggests mobile. They are fast, easy and affordable which are among the features that help to run and grow your business. Its portability and simplicity brings it to the list of highly recommended machines for small business owners.
In conclusion, a credit card processing machine is a must have for those businesses whose environment allows. It is definitely a wise business decision to take on.