Is chip technology good for business?
Yes, because chip technology means greater security and more streamlined processing, especially when combined with PIN authentication, which can reduce fraud. Merchants will no longer have to store vouchers for these types of transaction. Chip technology will also bring increased opportunities for self-service POS stations.
How will chip technology work?
The cardholder inserts the chip card into a card reader and leaves it in the terminal until the transaction is complete. The card reader identifies whether a card is PIN-enabled. If so, the customer will be prompted to enter their PIN rather than sign a receipt. Chip transactions will be similar to magnetic stripe transactions in most other respects.
Are there any changes to settlement procedures?
While chip technology eliminates the need for paper vouchers and streamlines reconciliation, it normally will not negatively affect back-end processes.
What are the fallback procedures if the POS terminal fails to read the chip?
If the chip fails, the magnetic stripe and signature can usually be used instead. Or, in chip and PIN countries, if the cardholder forgets their PIN, they may be allowed to use a signature. However, these options may be discontinued once migration to chip is sufficiently advanced within a particular country. This is one more reason why it is important to encourage customers to use chip technology now.
