Microchip embedded Cards will soon be the dominant style for all merchant account services. The deadline pasted October, 2015 that means banks will be in hot water if they don’t offer these new security features. Banks will need to provide microchip cards to consumers or be held accountable for fraud.
If you own a business, the pressure to upgrade your card readers will be felt not only from banks but from Visa and MasterCard. Once the deadline has been reached, businesses will be held liable for fraud if they haven’t upgraded in time.
The top 5 questions about Microchip Technology
Is this the future for your merchant account?
The Microchip Advantage
In today’s tech savvy world, it’s pretty easy to duplicate the magnetic strip on the back of credit cards. Hotels have machines that can recode the magnetic strips for room access. These machines can also be modified to duplicate existing credit and debit card magnetic strips. This particular technology runs a few hundred dollars on the internet and is accessible to anyone. With the Microchip integration, you don’t actually have to swipe your card the old fashioned way. The chip is simply authenticated over the reader. Cards will still have a magnetic chip in case there is need of standard processing. In theory, this is will greatly challenge the average counterfeiter and offer a more universal solution.
2. Universal Integration
Most people assume that the United States is leading this new technology. However, this is not true. Europe and most modern countries have already made the switch. In an attempt to make worldwide commerce smooth, it’s a step that must be taken. As a recent couple traveling in the Mediterranean found out the hard way. They were travelling with US standard magnetic strip credit cards and were shocked to find out some countries would accept the US based magnetic strip and microchip versions, while other countries would only accept microchip cards. Once they found a country with the ability to accept magnetic strip, they had issues with purchase limits and cash advances. They ended up applying for a new credit card with the updated technology, which took up half of their vacation time. Obviously having Merchant Services that are uniform has become a must in our worldwide economy.
3. The Microchip will not stop fraud
Anyone who could claim that any device can stop permanently fraud is sadly fooling themselves. No technology will ever be perfect and no merchant account will never be vulnerable. History has proven that eventually fraudsters will find a way to defeat even the best efforts to stop them. That is why it is so important to stay one step ahead or at least make it as hard as possible. We have seen Google and Apple both roll out new types of merchant account processing options that show signs of additional security. One step is using multiple paths. This option makes it so a hacker has many security measures to break through instead of breaking into only one company with one master database. This is one more step in making it harder for the bad guys.
4. Why should we change?
Most small businesses are not concerned what European companies do. It’s not associated with the day to day business, so why change? In some cases it may have very little effect except for liability, and a huge liability it can be. In the near future, depending on your type of business, you may be in serious hot water if you don’t upgrade. When fraud happens normally, it doesn’t affect the retailer but this is about to change. When you choose not to upgrade, you are opening the door to possible loses from fraud. This used to not be a concern since banks and card issues covered most the liability. Visa and MasterCard already have stated liability may hit the retailer. This could hurt any company at anytime.
5. Why don’t firms just switch?
Ultimately for most firms the cost is just too high in a already tough market. On average in can cost between $975 to $1200 dollars per unit to upgrade readers. This can be a huge burden while most businesses are still trying to regain lost profits from a struggling economy. The decision seems to be easier for firms opening the doors rather that established shops. One thing is for sure the October, 2015, deadline is getting close (unless you’re a gas station because they have until 2017) this could change the face of all merchant services.