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LOCAL HEADLINES SHOW THERE'S NO TIME LIKE NOW TO TALK TO MERCHANTS:
Fresno merchants lag in readiness to handle ‘smart cards’ 
More new credit, debit cards come with embedded microprocessor chips
Chips, new readers reduce risk for fraud from counterfeit credit cards
Many merchants still using machines that read only old magnetic stripes
By Tim Sheehan
Five months into a major transition for the credit card payment industry,
banks and credit card companies are playing catch-up to get new, more-secure
credit and debit cards embedded with computer chips into the wallets of their
customers.
But as more consumers get the cards, many merchants still lack the
technology to take advantage of the new cards’ security features. And by
lagging, they’re putting themselves at risk of losses for fraudulent
transactions made with counterfeit cards.
A microprocessor chip embedded in
new credit and debit cards communicates with chip-enabled credit card readers,
helping to prevent fraud through counterfeit cards.
A canvass of about 40 merchants and restaurants at northwest Fresno’s
popular Fig
Garden Village shopping center last week revealed that half have not yet
installed new card readers capable of processing transactions with the new
“smart-card” technology. Nearly a dozen others have updated readers installed –
but not activated – at their checkout counters. Of the businesses visited by
The Bee, only nine had their chip-card readers fully active to process
transactions.
For years, credit cards have embedded customer data on that black magnetic
stripe on the back of the card – the part that gets swiped through card-reading
machines at merchants’ cash registers. The problem with the decades-old
technology, however, is that the magnetic stripe can be easily skimmed or
copied, enabling fraudsters to make a counterfeit card.
The new “smart cards” use what is called EMV technology (named for credit
card companies Europay, MasterCard and Visa), and come embedded with a
prominent microprocessor chip in addition to the magnetic stripe on the back.
The chip, like the mag stripe, stores the customer’s payment information. But
the chip generates a special one-time-only electronic code for each card
transaction – a feature that makes it extremely difficult to counterfeit the
card.
The new card readers still can accept older mag-stripe cards, but they also
know when a card has a chip and requires the customer to insert the card into a
special chip-reading slot for the transaction.
It’s protecting us and protecting our customers. We’re glad to have it.
Jane Saunders, whose daughter owns Top Drawer
card shop in Fig Garden Village
Last Oct. 1 was the deadline set by major credit card companies for a shift
in financial liability. If a merchant had installed and activated a new card
reader capable of processing a chip-card transaction, they could not be held
liable for losses on any sales made on a counterfeited chip card. But if they
still were relying on a mag-stripe reader, the merchant – and not the
card-issuing bank or credit union – bears the loss.
“Issuance and adoption of EMV chip technology in the U.S. is really on-pace
with what we expected to see so far,” said Cathy Medich, the EMV Migration
Forum’s associate director. “The U.S. has a more complex payments environment
than any other country that has migrated, so while there’s still work to do,
there has been remarkable progress in the last two years.”
At the family-owned
Top Drawer card shop and boutique tucked into an out-of-the-way
corner at Fig Garden Village, Jane Saunders, whose daughter owns the business,
said she is happy her store has an active chip-card reader as an additional
layer of card security for both the store and its customers.
“It’s protecting us and protecting our customers. We’re glad to have it,”
Saunders said. “It’s just part of the cost of doing business.”
Jodi Hill, manager of independent shoe store
Heart and
Sole, agreed. “A lot of our customers are asking if we take the chip
cards,” she said. “We’re seeing more and more customers using the chip cards.”
Some of the nation’s biggest retailers, including Target and Walmart, led
the way in installing and activating chip-card readers in their stores more
than a year ago. Yet at Fig Garden Village and elsewhere, many of t
he
businesses that have not made the transition are national names – stores like
Pottery Barn, Bath & Body Works, Williams Sonoma, lululemon and Chipotle.
Slow transition
Smart cards have been in use for years in other parts of the world, but the
transition from mag-stripe technology to chip cards in the U.S. is an enormous
– and expensive – undertaking. The Congressional
Research Service report last fall estimated that about 1.2 billion credit
and debit cards are in circulation nationwide.
Oct. 1, 2015, was the deadline set by major credit card companies for
merchants to install and activate chip-card readers in order to avoid financial
liability for losses from counterfeited chip cards.
A year ago, the EMV Migration Forum predicted that about half of the cards in the
U.S., about 600 million, would be replaced by chip cards by the end of 2015.
That estimate has been revised downward.
“We estimate that over 400 million chip cards have been issued in the U.S.
as of the end of 2015, with most large and midsize financial institutions
completing their issuance during the first half of 2016,” Medich said last
week. Many banks and financial institutions are replacing customers’ old cards
as they expire; others are making chip cards available earlier if their
customers request them.
Cost is one of the factors cited by the Congressional Research Service in
the slow adoption of EMV technology in the U.S.
The cards aren’t cheap. Production costs for a traditional mag-stripe card
are about 25 to 50 cents each, according to the CRS report, compared to between
$1 and $4 per card to manufacture chip cards.
And the card readers aren’t cheap, either – between $100 and $600 apiece,
compared to $50 or $100 for mag-stripe-only readers, the CRS report stated.
Across the U.S., the transition ultimately will include about 12 million
card-reading terminals, according to the EMV Migration Forum.
Several of the local independent merchants said they were holding off either
because of the cost of the machines or because their credit-card processing
services were not yet ready to handle chip-card transactions.
Retailers and restaurants aren’t the only ones facing a conversion to the
new technology. Another key deadline is looming in October 2017, when gasoline
stations with pay-at-the-pump terminals must have chip-card technology in place
or face the same shift in liability for counterfeit card transactions.
Tim Sheehan: 559-441-6319, @TimSheehanNews
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FYI RE. EMS PHONE SWIPE FROM AVITA:
Just a friendly reminder -- the EMS Phone Swipe is not yet in the
interface. If someone would like to set a merchant up with this program
they can but
1. they have to use the link BELOW and
2. they have to email us to let
us know THAT THEY HAVE SUBMITTED THE MERCHANT.
If this is not done they will not get credit
for that merchant because we will have no way to track it.
Also I believe these will not go towards a level and
there is no up front money on this program. Just want to make sure
everyone knows this since we haven't really announced it or made it
available in the in interface.
Here is the link if you wish to share with your team!
www.plusbyems.com/4198
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Micros Info recorded call, click here.
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Excerpt From Mike Herron Team H'wood:
"Hello Team Hollywood! I hope everybody is having a fantastic weekend.
This week I was able to send in 3 merchant statements. All 3 analysis
came back overwhelmingly positive. I was able to save a liquor store
10%, a clothing boutique 23% and a party planner 35% per month on their
processing bill. Those are quite impressive numbers. Those savings, as
well as a new free terminal, were enough for all 3 owners to switch to
Digital World.
The whole process didn't take much time at
all. Once you submit a statement, you will receive the analysis email
in 48 hours or less. They say it could be longer but it hasn't been for
me. Each returned analysis also has an application attached as a PDF
file. So I downloaded and printed out both files and called agent
support to walk me through all of the pages. Avita also helped me
breakdown the analysis. We saved one merchant $145 a month and over
$5300 in 3 years, so I wanted to make sure I knew exactly where the
savings were coming from and where to point it out."
WAYTOGO, MIKE and NOTE TO ALL -- DON'T SIT ON THOSE ANALYSES!!
Get them back to your merchant so they can fill out and submit the application and START SAVING $$!!
Don't be a scaredy-cat: call Mike, Barb or support @ DW -- ONLY THE FIRST ONE IS SCARY!!
