Chip Reader Cards, the Future of Payment?

Best credit card rates for merchants

If you have any credit cards that you frequently use for payment, your provider has probably already issued you a new card. That new credit card is similar to your old one, expect that it now contains a small chip. When you checkout with your credit card, instead of swiping on the credit card reader, you now insert the cart. You are then prompted to input your card number and payment is withdrawn. Most banking institutions have switched to the chip credit card. Although most retailers have not entirely switched over to chip readers, many do current offer both payment options. Eventually, it is very likely that all card payment processing will be on chip readers, for a couple important reasons.

Quicker payment processing
You are likely to notice a difference in the amount of time it takes to check out with your sliding credit card versus your chip reader credit card. When you slide your credit card, the system runs all types of security and number measures. Most retailer?s credit card processing software takes some time to complete this process. The chip reading process, however, pulls up the information much quicker. The credit card processing software is able to access payment information easier. This enhanced process will speed up the checkout process and more customers will opt to use the chip credit cards.

More secure transactions
Many large retailers have been victim to customer theft. When a retailer?s credit card processing software is breached, customer?s confidential information falls into the wrong hands. Their credit and financial information can be falsely used, resulting in both financial and credit losses. Credit card chips tend to be much more secure and more difficult to breach. When using your traditional credit card, credit card payment processing regulations simply require a signature during purchase. Online shopping retailers may even waive this requirement, as a signature is more difficult to obtain.

However, when you shop with a chip reader card, you are required to input your bank number. Also, the credit card processing software records a unique transaction number. If a problem with the card?s identify comes up, the specific transaction can be identified. This differs from non chip credit cards, as they create a transaction ID that is specific only to the credit card, not the transaction. Customers and banking institutions will have an easier time tracking down false charges and identifying at what point the card was breached.

Forces retailers to upgrade
Although 88% of companies have had their POS software for less than 5 years, approximately only 46% of companies spend less than $1,500 per year on their POS software. Lack of updating and creating firewalls for security is dangerous for the businesses security. Data breaches totaled 1,540 worldwide in 2014, up 46% from the year before, and led to the compromise of more than one billion data records. One single data breach can put a retailer out of business and many business credit card services will not cover losses if the POS systems are not properly updated.

Considering that a large percentage of shoppers shop with credit or debit cards, the changeover to the pin credit card will force retailers to stay updated. Retailers that do not update their credit card payment service provider will be unable to accept payment from a large portion of their customers. The outcome is a win win situation for all.

Most credit card companies are in the process of switching over to chip reader cards. The chip readers will be beneficial for both customers and retailers. They result in a speedier checkout process that also created a unique transaction code, making individual purchases easier to track. The chip reader credit cards are also more secure, as they require more than a simple signature. Additionally, businesses are being forced to keep their POS systems updated in order to accept chip reader payment from their current customers. The chip reader credit card is the future of payment.

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