SS December 2015

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42 SMOKESHOP December 2015 T he United States has been one of the last industrialized nations in the world to switch to the EMV credit card payment system, which fea- tures cards with embedded microelec- tronic chips for added security. Devel- oped to combat massive fraud These cards have been in use elsewhere in the world for as long as a decade. Since the American market was so slow to adopt the technology, in fact, credit card com- panies resorted to incentivizing mer- chants and the card processing industry here by shifting fraud liability from the card issuing company onto merchants who do not utilize the EMV systems. The liability shift for POS terminals for Visa, MasterCard, American Express, and Dis- cover was October 1, 2015—a transition that's been in the works for three years. EMV stands for Europay, Master- Card, and Visa—the three companies that originally created the standard. It is now managed by EMVCo, a consortium that splits control equally among Visa, MasterCard, JCB, American Express, China UnionPay, and Discover. The EMV system was developed and implement by banks and other financial institutions to reduce the huge losses the industry faces from fraudulent charges. By simply getting a new EMV payment processing system, merchants can avoid responsibility under the "liability shift." The EMV system utilizes so-called smart cards (also called chip cards or IC cards) that are more secure than standard magnetic stripe credit cards, since they store their data on integrated circuits. For now, EMV cards issued in the U.S. still have magnetic stripes for backward compatibility with older POS systems, including those with later liability shift deadlines: October 2016 for MasterCard ATMs, and October 2017 for Visa ATMs and pay-at-pump gas stations. EMV cards that have been issued in the U.S. are typically "contact cards" that must be physically inserted into (and kept in) a reader throughout the entire transaction, but could also be "contact- less cards" that can be read wirelessly us- ing radio-frequency identification (RFID) technology. Most U.S.-issued credit chip cards support signature ("chip-and-sig- nature") but not PIN ("chip-and-PIN") credit cards, which continue to gain ground elsewhere in the world, but aren't as popular with consumers. Todd Youngblood, vice president of business development at Bolder, Co.- based Banctek Solutions, a leading pro- vider of secure payment technologies, recommends dual terminals when mak- ing the jump to EMV. "Terminals that can read both contact and non-contact smart cards will ensure that all your customers have the best ex- perience," says Youngblood. "Customers today like options, and in giving them choice, the user experience will meet their particular preference in payment style. Banctek specializes in working with businesses that the processing indus- try refers to as "high risk" merchant accounts, including tobacco. In fact, Banctek recently became a member of the International Premium Cigar & Pipe Retailers Association (IPCPR), impressed with the organization's support of small business and entrepreneurship in a very specialized industry. "Banctek will offer IPCPR tobacco retailers and wholesalers the necessary business technology to help ensure they are compliant with the latest payment processing data security stan- dards," Youngblood added. Banctek's services include merchant credit and debit card processing, POS software and services, equipment sales and leasing, ATMs, cash advance ser- vices, check guarantee services, gift and loyalty card issuance, ACH facilitation, and payment gateway processing. Youngblood notes that modern EMV solutions can tie into multiple payment systems such as mobile wallet and Apple Pay with the same security benefits as on POS terminals. And new form factors such as chips on key fobs or phone cases can also be accommodated. Banctek Solutions, 1215 Delaware St., Denver, Colorado 80204, Tel: (303) 623- 3290, Web: RETAILTOOLS > Safeguarding from Credit Card Fraud Liability: EMV B&M merchants who haven't upgraded to EMV (smart card) systems are now liable for fraudulent transactions. >STAFF REPORT

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