Target Selects MasterCard for Its New Chip Card and at POS

Jun 05, 2014
pin and cardTarget Corp., the second largest general retailer in the United States, has announced that it will accelerate chip-and-PIN payment card technology in its stores. The retailer plans to move its Redcard credit and debit card portfolio to cards that operate with MasterCard Inc.’s chip-and-pin technology, though many cards will not necessarily have the MasterCard brand.

The company will install chip-compatible point-of-sale systems and software in its nearly 1,800 stores within the United States by September. This will allow the locations to accept the new chip-enabled Redcards in early 2015, six months ahead of schedule.

Target had tested a chip card system ten years ago but abandoned it. In the wake of the data breach which compromised 40 million payment card numbers and non-card data on 70 million customers, it has again revisited the notion of chip technology. Target has even pledged $100 million to its chip card effort.

Target is just one major company that is propelling the change to chip-and-pin technology forward. Visa Inc. announced in 2011 that it planned to convert and all of the major general-purpose payment card networks have been putting in motion the conversion of their U.S. card bases from the fraud-vulnerable magnetic stripe to the Europay-MasterCard-Visa (EMV) chip standard. EMV cards provide better defenses against point-of-sale compromise and counterfeit fraud, though online card fraud hasn’t been reduced much.

The United States is the only major country that has yet to convert to EMV technology. While EMV has its advantages there is still more to be done to protect against counterfeit and fraudulent activities such as end-to-end encryption and tokenization, and a solution for online transactions. EMV pin and card technology though is still ahead of what the United States currently uses which is why many big merchants and banks are constantly advocating for the system.

With target stepping up it is likely that other merchants will slowly follow suit. Whether retailers choose MasterCard or Visa isn’t as important as the push to make this technology available. Though Target’s decision to use EMV pin and card technology (MasterCard), in lieu of chip and signature authentication (Visa) might allude to an ongoing conversation regarding how to best apply the technology.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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