chip & PIN - the new standard
As from December 31, 2010 all payment terminals in Europe must be ready for the new card standard EMV, which means that they must handle chip and PIN. To many merchants this means that they will need to invest in new equipment. Laura Martinsson, Product Manager for payment terminals at CEKAB, explains why the technology change is important.
- The main reason for switching to chip is security. A magnetic stripe is relatively simple to copy, but with chips skimming becomes practically impossible. Skimming has become a big problem for the card industry, since it results in huge costs for banks and merchants. The card holder will in most cases get their money back if they are victims of card fraud, but it can nevertheless be unpleasant. Therefore, it is important that all terminals are replaced within the next few years.
According to statistics from Visa, 80% of the cards in Sweden are equipped with chips, but only 20% of the terminals have chip readers.
Although security is the main reason that we switch to the new technology, there are other advantages with chips.
- The chip can store much more information than the magnetic stripe, which brings new business opportunities, says Laura. In the future you will be able to add various services to your bank card.
The first EMV terminal was released on the Swedish market in 2003. Since then, the technology has improved significantly.
- Many people experienced the first EMV terminals as slow, because of the more extensive security checks that are carried out during an EMV transaction, explains Laura. But the newer terminals are considerably faster. Moreover, the PIN function speeds up the purchase as you no longer need to check ID and signature.
Most of the payment terminals that are sold today are compatible with the EMV standard.
- Earlier the range of EMV terminals was quite limited, says Laura. But today there are chip terminals that suit most businesses. For example, a mobile terminal that can handle chip and PIN has been released, which has been in demand for a long time.