What is chip and pin technology? How does it work? Many individuals in the business world ask these questions as this technology is widely used. What’s more, merchants who do not accept using the chip and pin technology by 2015 risk absorbing the cost of disputed credit card transactions from their businesses.
Below is a closer look at how this state-of-the-art technology works and why it is vital for today’s businesses.
The Chip And Pin Technology
Chip and pin is the new evolution in electronic payment system and it helps to make the credit card payment system even more secure. Chip and pin cards use technology known as EMV (for Europay, MasterCard and Visa) which stores information on a special chip as opposed to the standard credit cards whose information is stored on a magnetic strip.
With credit cards, the cardholder’s signature is required during transactions, but the chip and pin cards work with a Personal Identification Number (PIN). These cards provide users with enhanced protection against card fraud because the embedded chips are encrypted and virtually impossible to replicate.
How It Works
The process of using a chip and pin card is very easy and extremely secure. These cards work together with chip-enabled POS terminals whereby both the card and the card holder are validated electronically. Using a chip and pin card during transactions involves a simple 4-step process;
- Step 1: During the first step you simply insert the chip and pin card in a chip-enabled POS system and leave it in place.
- Step 2: Once the card is in place, the screen of the POS terminal will give you instructions and will at one time ask for the PIN of the card. Once you enter the pin, the transaction begins.
- Step 3: The third step involves simply waiting for the transaction to be completed.
- Step 4: After the transaction is complete, you can retrieve your chip and pin card as well as the receipt produced by the POS Terminal. If you are a user of this card, you should never remove the card unless prompted to. In most cases though, an attendant at the point of sale terminal handles the card.
Why Move To Chip And Pin
If you own a restaurant or any type of retail shop/store, you should consider making the switch to using chip-enabled POS systems for two main reasons. For starters, time is running out, because as of October 2015 liability for any credit card frauds or disputes will switch from banks to card processors. The processors in turn are likely to pass on those costs to businesses that do not have point of sale systems that support chip and pin technology.
Another reason for making the switch to chip and pin enabled POS systems is the various benefits you stand to gain as a retailer. These benefits include protection against fraud, better security for credit card data for your customers, convenient cashless payments, and potentially advanced features in your POS payment terminals.
If you are a retailer who already uses credit card terminals, converting to the chip and pin technology is fairly easy. All you have to do is simply buy and install EMV-capable POS terminals.
This article was written by Craig Kendrick, a writer whose articles mainly feature the latest business solutions. Click here to get yourself good quality POS systems that support the chip and pin technology.