Cash Register, Point of Sale & Credit Card Information Central

EMV and Credit Card Processing Changes

Posted by Bryan Mueller on Fri, Mar 06, 2015 @ 10:10 AM

EMV_chip_closeupThere is a lot of buzz going around concerning the changes in credit card processing procedures. Beginning in October, the U.S. will adopt the  standard used by the rest of the world. This process is designed to clarify who the liable party is when fraudulent credit cards are presented. As a result, the technology required will shift the way credit card readers interact will cards. This transition may seem uncomfortable, so let us try to ease your mind. Here are a few key points on what this new regulation entails with further explanation below.

  1. The U.S. implementation only requires compliance by the credit card processor.
  2. The regulation DOES NOT require individual merchants to upgrade equipment.
  3. It is estimated to take credit card issuers up to 3 years to complete the replacement of all 2.1 billion credit cards in circulation in the U.S.
  4. You have time to figure out when is the best time to upgrade.

In an effort to reduce the amount of credit card fraud, the U.S. is adopting the same credit card technology used throughout most of the rest of the world. First introduced in 1995, EMV was named for the three companies that developed the technology; Europay/Mastercard/Visa. Since that time, there have been a total of six credit card networks to share in the ownership. The new system uses a microchip to create a dynamic verification code for each transaction processed on the card.

The magnetic stripe found on the back of most cards contains the credit card number, customer name, address, zip code and a static 4 digit verification (CVV1) code that the point of sale system uses to authenticate the card. There is also a 3 digit code (CVV2) printed on the back of the card that can be used to verify hand entered transactions. The problems involved with this type of system occur when the data on the cards is intercepted or hacked from a store’s database (like what happened to Target) and all that information can be recoded or cloned onto another card. After all, it is the same technology as an old cassette tape and it was easy enough to record over those.

With the addition of a microchip, a new verification code is generated for each transaction. This virtually eliminates the possibility of cloning a working card. In addition to the built in safety measures of the chip, there are also customer verification methods (CVM) available. These options include entering a PIN when using the card, requiring a signature or enabling Near Field Communication (NFC) for paying with a fob or smartphone. These options are programmed into the chip based on preferences set by either the card issuer or card holder and can vary based on total transaction amount, location, etc.

creditcardfraudchart_1The Electronic Transaction Association (ETA) has compiled the following concerning credit card processing. In the U.S., credit card transactions comprise $1.2 trillion and there are a total of $8 billion of fraudulent charges. While that number comprises only 0.67% of total credit card revenue, $8 billion is still a lot of money. In fact, 47% of all credit card fraud occurs in the United States. EMV implementation could eliminate 78% of US fraud cases by eliminating cloned cards.

creditcardfraudcharts_1and2

Since most of the rest of the world is already on the EMV system, the primary reason for delay in the U.S. conversion is due to the infrastructure. The US was a very early adopter of credit card technology and right now there are approximately 8 million merchants using the swipe style card readers. To force that many merchants to switch over involves a significant investment in technology upgrades on the processor side as well as hardware upgrades for businesses.

emv_card_readerThe new hardware will require the card be inserted into the reader for the duration of the transaction. This is because the microchip doesn’t have a battery and therefore has no method of transmitting data on its own. The gold casing over the microchip is powered through induction by the card reader. This will have the most impact on the restaurant and service industry. When a card requires a PIN or signature for confirmation, a mobile reader will be necessary or the customer will have to accompany the card to the host station.

Starting in October, the credit card processors are required to have the infrastructure in place to accept EMV payments. So, how does this affect liability? After that time, liability will be split between the card issuer and the merchant and will fall to the party responsible for not allowing the EMV transaction to take place. For Example:

  • If a merchant has the EMV reader in place, but the customer has not receive a card with the chip from their bank, the liability for a fraudulent transaction is on the issuer.
  • If a customer attempts to use an EMV card at a merchant who has not upgraded to the EMV reader, the liability will be on the merchant.

There will likely be an overlap of technologies for quite a while. Many card issuers will wait until the expiration of their current cycle of cards until they upgrade. There are a total of 2.1 billion cards in the market at the moment, and to replace them all is expensive. Cards with just a mag stripe can be produced for about $.10 per card while cards that have the EMV chip in them cost between $1-2 to produce. New cards issued will continue to include magnetic stripes for several years, knowing not every merchant will upgrade equipment right way.

There are also some exceptions to the liability rule. Gas stations have been allowed more time to implement the conversion. Most card readers are built into the pumps and require a complete replacement. ATMs will also have extra time to upgrade for the same reason.

As you consider the options indicative with upgrading, you may come up with more questions. In such cases, American Metro is happy to help you find answers. Use the button below to contact our resident credit card expert or email your question to nadya@americanmetro.com.
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Tags: Credit Card Equipment

M-Box Credit Card Processing Demo Video

Posted by Bryan Mueller on Wed, Feb 05, 2014 @ 12:46 PM

Seing is believing, right? With as often as the m-Box gets mentioned around here, it would be nice to actually see what it can do. Well, here's your chance to catch it in action. This promo video covers the basics of using the m-Box for credit card processing as well as highlighting the benefits of the online reporting component. You can even get a glimpse of what the online web portal looks like.

If you would like to know more about the how American Metro can boost the productivity of you business with a cash register and credit card processing, or to get a quote, just click the button below.

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Tags: Event Planning, Credit Card Equipment, M-Box

Accepting Credit Cards: Handheld vs. Integrated

Posted by Bryan Mueller on Mon, Oct 28, 2013 @ 10:48 AM

If you are thinking about accepting credit cards at your next event, consider these points on the differences between using a handheld terminal and integrated credit card options. Hopefully these will be able to assist you in making the right decision and improve the success of your event.

battery icon1)  No-Power (battery) vs. Power:

Handheld credit terminals are great if power sources are limited or unavailable. They have rechargeable batteries that can last up to 6-8 hours. The integrated system MUST have a power source to operate.

cash register icon2)  Register vs. No Register:

Integrated credit card processing takes place directly with the register. If you need or would like a register to assist with handling cash transactions as well, this option is both faster and more accurate. The Handheld is small and portable, so it takes up less room. With this option, you will need to establish a different system to handle your cash.

mobility icon3)  Mobility vs. Fixed Location:

Handheld credit card terminals offer lots of mobility. They can be very useful to trim down long lines by walking though the lines and checking out the individuals who are paying with credit or debit. It also works well for conventions or craft fairs when there are multiple transaction locations happening.

connectivity icon4)  Connectivity Concerns:

If there are potential connectivity issues at your venue, a backup plan is always a great idea. With some handheld credit card terminals, they have a “store and forward” mode. This allows you to accept payments offline that can be processed later. With an integrated system, if connectivity is lost, you are unable to accept electronic payments. Please note however, there are certain risks while in the store and forward mode. You are not getting a true authorization from the processor, so there is a risk some cards might be declined.

reporting icon5) Inventory Reporting:

The integrated credit card option has a higher detailed report of all transactions. If your event needs inventory reporting by instant data readings, then this would be your best option. The handheld credit card terminals only track the credit/debit transactions, not the actual items being sold.

Whether a hand-held terminal is right for you or using a point of sale system with integrated credit card processing is what you are after, American Metro is here to help. For additional information on credit card processing and pricing options, please follow the link below for a free, no obligation quote.

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Tags: Event Planning, Rental, Point Of Sale, Credit Card Equipment

THE POWER OF PLASTIC (There’s muscle in those credit cards)

Posted by Haley Kavanaugh on Wed, May 08, 2013 @ 03:12 PM

customer with credit cardInteresting figures out from Dunn and Bradstreet point to an easy way to increase POS revenue at events and even in general business transactions. Quite simply, push the power of plastic.

Findings show the average American consumer will spend between 12 and 18 percent more per transaction when using a credit card as opposed to cash or check, even on small ticket purchases.  For instance, global fast food giant McDonald’s reports their average sale per customer increased from $4.50 to $7.00 when using their credit/debit card.

And most other establishments where the average ticket is above $20.00 find more than half of their customers will opt for plastic over cash.

WHAT DOES THIS MEAN FOR YOU?

Making the use of credit cards and other forms of plastic convenient, easy and fast can only improve your overall revenue. To calculate possible returns, take a look at these examples, to see the likely impact to your bottom line and profitability.

In the case of an event, if you know historical or expected attendance numbers as well as the average amount spent per attendee, you can make this very simple calculation too.

Example of a festival not currently accepting credit cards at all sales areas:

125,000 people in attendance
$20.00 spent per attendee
$2,500,000.00 total revenue

If every attendee opted to use their credit/debit card and spent D&B’s lowest projected increase of 12 percent more at your event, increased revenue would be $300,000.00.

Of course we all know not every customer is going to choose plastic, but this is where revenue increases become very real.

If 5 percent of attendees use their credit/debit cards:          $15,000.00 increased revenue
If 10 percent of attendees use their credit/debit cards:        $30,000.00 increased revenue

Actual expectations will be 30 percent of attendees:            $90,000.00
- Credit card processing fees, at 3 percent:                       ($ 2,700.00)   
Net Revenue Increase                                                              $87,300.00   

The verdict is clear. There’s power and a whole lot of profitability in plastic. Call us today at 888-645-4876 to enter in your statistics and reveal how much more revenue you could be bringing in at your event.

Tags: Events, Credit Card Equipment