Jeff White, CEO, Pensmore
Chip & PIN is the EMV Smart Card Payment System that is on the rise for use with credit, debit or ATM Cards. This technology became accepted virtually overnight in many European countries but has been slow to catch on in the United States.
Chip and PIN is exactly what you think it is. It is a card with an embedded chip with a PIN. The magnetic strip that only requires a signature is eliminated and replaced it with an embedded chip that requires a PIN. The PIN is entered by the consumer on a wireless keypad and the card never has to be handed over to the attendant.
This technology reduces fraud due to the fact that the "chipped" cards are virtually impossible to clone and in the highly unlikely event that a chipped card was cloned, the fraudster would still need to PIN to complete a transaction.
- Cardholders have a greater sense of security for their cards.
- Point-of-sale transactions can be completed quickly and easily without the card ever leaving the owner's sight so there is less chance of cloning like with a magnetic stripe card.
- However, there does exist a greater amount of consumer accountability. Cardholders cannot hold retailers responsible for fraud sine they are the only ones who have access to the correct PIN, thereby, decreasing liability on stores.
- On behalf of retailers, transactions can be completed more rapidly with this process and there is a decreased need for excess receipt paper since signatures are not required.
Both cardholders and retailers can only hope that Americans receive the benefit Europeans are already receiving with this technology sooner rather than later.
Jeff White is President and CEO of Pensmore Software a provider of POS and other merchant services.