EMV Will Eliminate The Magnetic Stripe On Your Credit Card? Not So Fast!
A common misconception going around the news world is that EMV or “chip and pin” adoption will eliminate the magnetic stripe on credit cards by 2015. While the end of magnetic stripe (or magstripe) technology may indeed happen in the near future, you shouldn’t expect your next card to only feature a chip. Despite the fact that stripe technology goes back to the 1960s, reports of its impending death are grossly exaggerated.
If all cards were exclusively switched out with EMV technology tomorrow, the inconvenience to consumers would make front page headlines. This is because not all stores have EMV readers installed, and shops with chip and pin readers may not be connected to a payment processing network that can handle the data. Although networks were expected to be compliant by April 1, 2013, some technical and legal details have created delays. At this point, the difference in technologies means that trying to pay with EMV on an older terminal or POS system would be akin to expecting a Betamax VCR to play a DVD.
One huge area of inconvenience would be self-service gas pumps, which do not have to be EMV compliant by 2017. If consumers did not have stripes on their debit and credit cards, they would all be lined up at the cash register waiting to pre-pay. Because each gas pump has its own reader, and some stations have over a dozen pumps, replacing all the self-service terminals will require a lot of time and money. This is the reason that the roadmap for migration to EMV cards takes this factor into account. For the time being, the smartcard that gets issued to you is going to have a stripe on the back.
Another recent trend in card processing which will have to adapt to EMV is smartphone and tablet solutions like Square, PayPal Here, and Intuit Gopayment. Card readers that plug into headphone jacks, as well as USB-based readers for PCs and POS systems, will all need an alternative that can accept chips and contactless payments. For thousands of shop owners who may have just switched over to “business in a box” solutions like Square Register and First Data’s Clover system, a vanishing credit card stripe would mean that every card number must be entered manually, which adds at least 1% to the price of each transaction while wasting valuable time.
Store owners of all sizes should be prepared for the change when it does happen, and if your terminal is not EMV capable then it may be time to make a change. Even though the magstripe is going to be around for awhile, more and more people are going to be acclimated to inserting their cards into a reader. If your store does not have such technology by 2015, shoppers may believe that your store’s cardholder protection measures are not up to standard. At Dependable Solutions, our customers who have switched to smartcard readers generally find that the new terminals are smaller, easier to use, and offer a lot more features than the obsolescent machines that they replaced.
If you're a business owner and you're one of our current customers or you would like to learn more about what we have the offer when it comes to smart card ready Terminals. Contact us today.
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