There is a Possible EMV Delay Due to Uncertainties

Feb 06, 2014
finTech_emv

 

It is possible that there could be a delay transferring debit cards from PIN to EMV due to discussion and uncertainty in the United States government. The problem is that as of yet, no standard model has developed for processing EMV payments. This has aggravated both business owners anc consumers, especially after the Target data breach. EMV cards are less prone to being hacked, versus PIN cards, and could be a saving grace for the US plastic card companies.

Walmart has pushed EMV cards for years. Visa and MasterCard had set EMV migration deadlines for October 2012, which has now passed. The original plan was that by April 2013, acquirer-processors and sub-processors must support chip transactions. The liability for fraudulent transactions depends on the card brand, and now but Oct. 1 of 2015 and 2017 are key dates for Visa, and Oct. 1 of 2015, 2016 and 2017 are key dates for MasterCard. American Express has announced Oct. 1, 2015 for its liability shift date. Parties not adopting EMV by the relevant deadline could bear the financial consequences of fraudulent transactions.

Card brands also differ over methods for EMV card acceptance. While MasterCard and Discover want Chip and PIN for added security, Visa has said says that the security of online processing removes the need for the offline authentication of Chip and PIN. To complicate matters even further, many in the industry believe that merchants should upgrade payment terminals to accept mobile payments and EMV acceptance capabilities at the same time.

Nevertheless, implementation of contactless and EMV standards remains stymied because in the U.S they really are not “standards” at all. Disputes and non-cooperation persist in the NFC payments market, as telecoms and handset manufacturers argue for their preferred approach. What’s more, issuers, merchants, card firms and regulators in the U.S. still are not agreed on liability, the burden of terminal conversion or the politics of implementation.

While EMV in the U.K. was enabled by a collaborative effort including the government, bank users and associations, U.S. interests have failed to fall into alignment. Until that happens, no one wants to pay for terminal conversion, which Javelin Research estimates could cost as much as $12 billion. Of course this assumes that the industry could actually reach agreement on who should pay, or how.

While the implantation of EMV is exciting for those in the card and processing industry, it is facing an uncertain future. While congressional arguments can prolonged this change, congress is not at fault. Various card companies, as well as processors, still seem hesitant to change, even though this change is great for consumers and businesses.

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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.

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