It has been 17 months since retailers were asked to upgrade their point of sales systems to accept EMV enabled credit cards. The benefits of the EMV chip card are numerous, making information harder to steal, lessening the ability for fraudulent sales and hacking. In fact, right now, only 58% of eligible business have made the switch to the new terminals.
Why?
Well some merchants purchased payment terminals two or three years ago and are not willing to invest in new terminals. Yes if you lease them they will cost a bit more over the course of a lease, but we are talking about $400 dollars for a basic terminal that can run most businesses. The Mom and Pop shops have invested in a perfectly good terminal that they will probably get another 10 years out of, and in their mind, why should I spend that kind of money when the odds of me getting a fraudulent card are very slim.
And hardware is not the only stopping block. There are many chip enabled terminals that are in place across the country that do not take the chip cards. Why? Because they do not have the programming and software installed to be able to accept the new chip cards. Taking the chip card is a 2 part process for the merchant. First, the merchant must load the newly developed software from a third party to allow the terminal to accept EMV chips. The second process is the certification process that each of the card networks need the merchant to go through. This is coordinated by the merchants acquiring bank. This que to be certified has been very long with weeks waits for merchants.
The third issue that merchants are dealing with the new EMV terminals is the time of transaction. You have probably noticed, these terminals can be a little cumbersome, and clumsy. People pulling their cards out too soon is a common problem. Time of transaction is another issue. EMV transactions are typically 3-5 times longer than a traditional mag stripe card. In a high volume business, this translates to slower sales and lost volume.
But not being compliant has its risks. The biggest risk is being responsible for fraudulent transactions. If your business processes a mag stripe card that is stolen or counterfeit, your business can and will be responsible for the amount stolen, not the banks as it has been in the past. For some merchants, this can amount to 1000’s of dollars for one transaction. Is that worth the wait?

Emv chips and processing is here to stay. It is both the norm and the future of credit card processing. If you are not part of the EMV world, do you really want to take that risk? It is time to take the steps to become compliant.

When a business owner begins their venture into eCommerce, it will be crucial that they contract with a merchant services provider. While there are many merchant services providers out there, picking the right one will take some research and a solid foundation of knowledge. Merchant services providers are all different; it is crucial to figure out your requirements to identify the best fit for your business.

Payment Processing

Will your business require batch payment processor real-time payment process? With batch processing, the order is then handled by an individual either by getting in touch with the payment processing company to confirm the legitimacy of the credit card number or by utilizing a point-of-sale terminal to swipe the card. The customer is notified immediately that the order is accepted when the credit card is verified, and the money is moved from the client’s account to the merchant’s account. When deciding, consider some transactions that may occur. If you are anticipating a low volume of sales, then this type of processing is something to consider. It is not as pricey as real-time processing. The main drawback to batch processing is the time factor. Real-time processing is more suited for bigger volume sales and for certain items that are sent over electronically.

Knowing Your Business

A business owner should be well-versed in their financial reports; because these statistics are going to weigh heavily on what merchant services provider is chosen.

Additionally, some banks have a set amount of transactions a month. Thus, if you do not meet this minimum, you could be required to pay a separate fee. Other banks will ask you to project how many transactions you think will occur on your site. Your business’s strengths and weaknesses will also influence the type of services you need from your provider. For example, if you lack state-of-the-art resources, then it would be in your favor to choose a merchant account provider that emphasizes customer service.

Rates and Fees

Web-based e-tailers and other eCommerce ventures need to be aware of the rates and fees they will be assessed when contracting with a merchant services provider. Typical costs include transaction fees, discount rates, and set-up or application fees. Fees vary among the merchant services providers based on credit history, type of business, and transaction volume. Merchant accounts have several fees, some that are time-based, and others that deal with a percentage format.

Assess your technology and service requirements. When an entrepreneur makes the jump to eCommerce, selecting a merchant services provider is only one of many aspects that have to be integrated together. Utilize a shopping cart solution and locate a merchant services provider, although many providers feature shopping cart solutions of their own.

Also required is payment system that processes transactions and a payment gateway to securely capture and process payments. Several merchant services providers offer systems that include each of these aspects. Many will bundle merchant services and other eCommerce services into their packages. Working alongside a merchant services provider that provide integrated services indicates that each level of the transaction works in conjunction with the other, meaningless difficulties on your end.

If the merchant services provider does not offer this type of service, the exact software that is used should be discovered. On occasion, a dealer account company will provide more affordable merchant services and then overcharge on software. A reputable merchant services provider will provide guidance about which type of software would be best for this situation.

Information such as this can be crucial to a business just starting out, that can not afford to make a mistake early on. Finding the right companies to partner with is a big step in the process of operating a successful business. Starting up an eCommerce venture is no easy task. If it were, everyone would do it! It is critical to know your own business inside and out; it will inevitably save you tons of time, effort, and money.

When your business plans to accept debit and credit cards-either at your brick and mortar, online or by phone, you will need a merchant services processor so you can accept them. There will be some upfront costs and fees for doing so.  Fees if you have been a cash only business, that you are not accustomed to paying.  But the extra costs that are associated with taking credit cards far outweigh the disadvantages of you not taking them.

The biggest change you will see almost immediately is the boost in sales.  Credit card purchase encompass almost 80% of all purchases in the US marketplace.  By being cash only, you have been excluding these customers from your business.  People have a different mindset when they purchase with plastic.  Cash is a physical action you have to take to make a purchase.  You pull your wallet out of your purse or pocket, you pull your physical money out and you see it transferred directly to the merchant.  It is difficult, it can be painful.  One minute you have $200 in your pocket, and the next minute you have $25.00 and the goods you just purchased.  With plastic, you hand your card over to the business attendant, they process the payment, you sign for it, get a receipt that you barely look at and put it in your pocket.  Not until the end of the month will you receive your statement that gives you your payment balance.

Choosing a credit card processor can be a difficult task.  It is wise to compare the pros and cons of your options before signing a contract.  Here are several factors to consider.

Fees and Costs

Processing costs can range from .025% to 5% on all transactions a company processes through their terminals.  There are many companies available to you who offer products that are competitive and offer the same level of service as those who are charging a higher percentage.

How much are the fees and other costs?

Credit card processing fees can be up to 5% on everything a company earns from its credit and debit card sales, according to the U.S. Small Business Administration. However, some companies might charge much less than others while offering the same products and level of service.

Fees to watch out for and compare: Interchange fees, monthly statement fees, application and set up fees, application and set up fees, monthly minimum fees, monthly gateway access fees, and early termination fees.  All of these fees are subject negotiation and are offered in tier pricing by different companies based on your volume of processing. Make sure you understand all of these fees and service terms.  Make sure they can provide you with a detailed explanation on all costs and fees and if they cannot, then find another processor.

What is the setup time?

Many companies have the ability to set you up in as little as 24 hours after your application.  The normal amount of time is usually 3-5 days from application until approval.

What are the accepted payment types?

You will want to make sure that your new processor accepts all major credit and debit card so you do not have to turn away any possible customers. Also, you may want to include a system that accepts prepaid cards and gift cards.

Is your system up to date with new payment procedures:

Most customers are very tech savvy now.  NFC (Near field technology) is the latest payment processing that will allow you to accept digital wallets like Apple Pay, Samsung Pay, or Google Wallet. This technology allows customers to make a payment with a simple touch of their cell phone.

Is customer support reliable?

If you run into processing, terminal, or technical problems how reliable is their customer support. Make sure you hire a processor that offers 24/7 support and you will need direct support from an account rep who can solve your issues. There may be an extra cost for this service, but it will be some of the best money you can spend.

Good luck with your search for a reputable merchant services provider.  There are many solid companies available for you to contact.  Find the right one and then good luck in the new world of credit card processing.

One of the biggest challenge any small business can face is finding the resources, time and money,  to compete with the larger, more established enterprises they compete against.  One tool that the small business has in its arsenal is the ability to accept credit cards.  According to sources in 2014 72% of all American consumers owned at least one credit card.  And that number is higher now.  There is not a small business in this country that can afford to ignore those numbers. Neither can they afford to ignore the new move to mobile payment systems.

By accepting credit cards the small business can benefit in many ways.  Their business become an immediate consumer shopping option for those people who prefer to use their cards instead of cash. Seeing the logos that you have posted in your windows gives the customer the confidence that you offer superior service.  This also legitimizes our business and puts you in the league with your larger competitors.

The convenience of accepting credit cards for your customers either dipping or swiping, cuts down on transactions time and lets your customers have more time for themselves.   Your business will also benefit.  With shorter transaction times, you will have time to work with and sell to more customers. Then at the end of the day, you can send all of your transactions to the crecit card processing system in one batch for settlement.

Security in transactions has been the major part of discussion for the last several years.  Several security breaches at companies like Target, Petsmart, and even the IRS have made security for electronic transactions one of the most important topics in todays merchant society.  Because of fraud, because of hacking, in October of 2015, the United States merchant processors mandated that EMV or smart chips be required on all credit and debit cards.  Also, merchants were also mandated to be able to take these new EMV chip cards.

As the journey for small businesses to transfer from magnetic swiping technology on their credit card machines continues to evolve, we can learn one thing.  The system is getting better. Last year’s back orders of EMV terminals is not affecting us right now.  The software techs to program the machines have worked out most of the bugs and your machines can be programmed in a matter of hours now instead of days, and there is a program in place for business now, who have not changed from swipe to EMV, to forgo any fraudulent charges on your account under the magic $25-dollar line.  That is all good news for the businesses who have not switched to EMV technology yet.

 

But the question still begs, why have you not switched?  You have not found the right program, you are comfortable with the system the way it is?  You like gambling with your businesses money?  As a former owner of a bicycle shop in Arizona, I would take charges for bicycles that cost thousands of dollars.  If I was using old technology, and I took a fraudulent card and was held liable for that sale, it would take me months to recover from that loss.  Forget about if it happened to me two or three times in a month.  That kind of loss would have hurt our business.   So why are you playing roulette with   your business and credit card transactions?

 

The main stumbling block right now is time of transactions.  High volume businesses have long complained that they do not want to use the chip EMV technology because the time to make an approval is 3 – 4 times longer than the magnetic strip swipe.  This will be a problem of the past soon.  Both major credit card providers Mastercard and Visa have been working on updates to speed up the transaction response time.   By the middle of December, these updates will be running and transaction times should be cut in at least half if not more.

 

Now is the time for your small business to make the change to EMV.  You can expect the process to be much smoother for you, and you will be protecting your business from chargebacks of fraudulent card usage by switching to the dip.

The payment cards industries mandate to transition all US credit cards to EMV chips is almost 1-year-old and has not been an easy ride.   Delays, chargebacks that are unwarranted, and even customer confusion as to whether to dip or slide have kept the transaction confusing and slow.   The lack of a centralized plan has also contributed to the slowness of the transition.

 

Merchants who have complied are still getting hit with chargebacks, and this has caused many serious financial harm.  But what is the alternative.  If you do not convert, then all your swipe transactions, potentially could be charged back if you are using enabled terminals.

 

In Miami, a class action law filed by a couple of retailers accused the card companies of slowing down the entire process in an attempt to distribute the liability costs onto the retailers.  Dieger Bohn, executive editor of “The Verge” tweeted: “US rollout of chip payments has been awful. Every point of sale terminal is a horrible guessing game.”

 

And he is right.  Even though a rash of retails have been approved to implement EMV over the last month, the actual statistics of the number of enabled retailers is very hard to come by.   As of 2 months ago the number was around 30% of all US retailers.

 

Chip and pin seem to be the way to go for the best security, but for some reason, the largest card issuers Visa and MasterCard are opposing this technology.  Officially, the bank line is that the pin burdens the consumer, or, they would want you to believe that people cannot remember their pin number.

 

One of the big issues is that data sent out over the network with a chip is the same as it was when you were swiping.  Data is taken in, cc number, expiration date are sent out over an unencrypted network to the processor and then the issuing bank.  If you, the merchant, want your data encrypted, there is an extra charge for Peer-to Peer Encryption.  This is a better solution, but adds to your processing cost.

 

The good news is, these are growing pains, and the banks are working on new chip software that is faster to process, easier to convert, and more secure.  This software has been promised by December 2016 and should shorten transaction times by a minimum of 15 seconds.

 

EMV processing is here to stay, and despite the problems now, it is a required and necessary part of all business processing in F2F (face to face) transactions.  Your liability for your small business increases 10 fold if you are still swiping and have not converted to the dip technology.  It takes time to get your terminals programmed as there is a backlog due to increased demand.  Get started right and change to your EMV enabled terminals now.

THE CREDIT CARD PROCESSING

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

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 Compliance

  • 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 Compliance

  • 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.