With as many as 5 million mobile point-of-sale readers in circulation in the United States, mobile POS companies will have their hands full following the liability shift set for October 2015 when the nation’s payment card networks step up the migration to the MasterCard-Visa chip and pin system. While this change is fantastic for security reasons, there are sure to be glitches along the way for those vendors who are not equipped to take the new chip and pin cards.
Certainly, any security-conscious merchant likely will be among the first to switch to chip-compatible mobile card readers, however, these switches may come with a high cost for portable readers. While processors such as Square charge monthly fees that are currently affordable, these fees are liable to jump when new software and new readers are to be doled out to vendors. Of course, vendors could easily raise their prices a bit to offset the cost, but that could push even the loyalist of consumers away.
Merchants using mobile readers are more likely than those using traditional POS systems to wait until the October 2015 deadline to purchase new materials, as portable readers have a shorter lifespan. Now, very few systems are affordable to start-up companies. One, such as For example, an MX860 payment terminal from VeriFone Systems Inc. lists for $606.30 on BarcodesInc.com. At MagTek Inc., a Seal Beach, Calif.-based manufacturer that sells a Bluetooth-enabled mobile card reader that works with chip and pin and mag-stripe cards that are in use now. However, many vendors are still liable to wait until the deadline to purchase new tools. This wait could be potentially dangerous to companies that wait too long, as a shortage of chip and pin readers are possible. When technology changes and everyone wants in at one time, a shortage usually occurs. This is damaging to the economy.
The wait-in purchase could be a good thing, as the release dates for chip and pin cards have been changed many times in the past. However, since the Target data theft in December 2013, both consumers and vendors have begged for more advanced security – and the chip and pin method provides it. It is not 100% new technology to the market; Europe has used chip and pin cards for many years and has a very low theft amount because of it.
Regardless of when a company chooses to switch its POS system reader, there is likely to be some type of fee associated with the change. However, this fee is nominal compared to the updated security features that chip and pin cards offer consumers and vendors. While the change to chip and pin cards are set for October 2015, there is always a risk of the date change. Nevertheless, for the consumers and vendors at risk of hackers, everyone is hopeful that this changeover is effortless, and comes on time.