Credit Card Machines with Chip Reader
A lot has been changing in the payment processing realm. Upgraded technology becoming available. contactless payments, EMV, NFC, chip cards, chip readers…the list goes on. So, is it important stay current with the new payment processing technology? Prior to the ‘liability switch,’ the answer to that question might be ‘it’s not imperative’. As of October 1st, 2015 the liability for fraudulent charges now falls on the merchant if you are not using the newest credit card machine with a chip reader.
Where did Chip Readers Start?
Credit card machines with chips also known as ‘EMV’ compatible are at the center of the change in liability among merchants. Chip cards were initially started in Europe to cut down on fraudulently activity and identity theft. Shortly after Canada joined the movement and now the United States has taken action against card theft as well. The way these ‘new’ cards work is by creating a new set of data each time a transaction is made, as opposed to the traditional magnetic-stripe where the same static set of data is processed. Keeping the data and codes dynamic versus static reduces the ability for an individual or organization to “skim” a customer’s information because there is a new set of data being produced during each transaction, it becomes impossible to recreate.
Processing a Credit Card with Chip (EMV)
Having a credit card machine that has a chip reader can process cards two ways: the traditional swiping method of the magnetic-stripe, or inserting the card into the machine. Here the chip reader and chip within the card, write and send information to one another, completing the transaction. The magnetic-stripe on chip cards is there essentially for a ‘back-up’ form of processing. Currently, if a business processes a fraudulent card without a credit card machine with a chip reader, the merchant then becomes liable for the damage. While this may not be a huge issue for a small business, large corporations who do not switch to credit machines with chip reading technology are putting themselves at enormous risk.
Make the Switch to Chip-Capable Credit Card Machines
Upgrading your system to include a credit card machine with chip reader is cost effective. With the help of your merchant services company the transition is smooth and the most efficient and safe way to process credit cards within your business.