Will Chip-and-Signature Protect Consumers?

Apr 23, 2015

Walmart’s senior vice president and assistant treasurer, Mike Cook, called the rollout of chip-and-signature cards “worthless”. Cook believes that the U.S. should have backed a chip-and-PIN system that would almost guarantee the elimination of consumer credit card fraud. At the Electronic Transaction Association’s Transact conference in San Francisco, the executive blasted the U.S. treasury and financial institutions for not going far enough to protect consumers in a time where large scale data breaches are almost common place. Cook pointed to the clear superiority of a chip-and-PIN system over a chip-and-signature. In the case of the Home Depot and Target breaches, he noted that criminals couldn’t use the cards if they didn’t have the PIN.

Cook isn’t alone in his support of PIN technology. AFPs manager of treasury, Magnus Carlsson, states that chip-and-PIN tech would cause retailers to experience lower sales because of supposed negative customer experiences. However, many retailers support PIN authentication because of its ability to drastically reduce fraud. But card issuers claim that the extra security that comes with PIN authentication, is simply not worth the cost of upgrades that would have to occur nationwide. Plus companies like Visa question investing in chip-and-PIN when technology, like Apple Pay, are clearly the next step in the payment processing evolution. They argue that card issuers should focus on integrating these sorts of technologies with card issuers and retailers.

Liz Garner, vice president of the Merchant Advisory Group (MAG), agrees with Cook. She believes that authentication would be more secure if consumers had to enter a secret password/PIN, instead of signatures since they are easy to counterfeit. She believes merchants need another layer of security when performing high risk transactions. When cards are issued without a password or PIN requirement, it takes away the merchant’s ability to have this second layer of protection.

According to Garner, since merchants are responsible for more than half of fraud losses and over 70 percent of card-not-present losses, card issuers are not motivated to fund the second layer of authentication. Though she admits that some merchants might not want the second layer on low dollar transactions. According to a 2015 AFP Payments Fraud and Control Survey, 61 percent of respondents think that chip-and-PIN would be more effective than chip-and-signature.

Is your business ready to process EMV enabled debit and credit cards? eMerchantBroker.com is the number one payment processor that handles both good and bad credit merchant accounts.

Let us help you get a high risk merchant account today!

Get Started

Award winning.

  • 2012
  • 2013
  • 2014
  • 2015
  • 2016

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.

Live Chat