Transactions have been rocky at best since the introduction of EMV chips in Credit/Debit cards. Even after almost 3 years, business owners and consumers both are still confused about some of the facts regarding these cards.
Some even so confused that they decided to not make the shift. For any retailers smaller than the McDonalds or Wal-Mart’s of this world, shifting with the changes is a must to remain in business with a strong position.
There has been a lot of confusion about the EMV chip cards. One particular area is the difference between Signature & Chip and PIN & Chip.
When a customer pays for something with EMV chip-enabled card, they will use either a PIN or signature.
But what’s the difference?
Let me explain.
What type of authentication, PIN or Signature, is needed for a transaction depends on the type of card. Some need signature and some require a PIN. That’s why, every time your customers make a payment, the type of authentication may change.
In most cases, the debit cards require PIN and credit cards require a signature. However, there could be some exception depending on the card issuer.
It is almost similar to magnetic stripe cards. The only difference is the way your customers insert the card.
Using Debit as Credit
There are a lot of credit card processing machines that allow the customers to skip PIN verification and let you shift to signature authentication like credit cards.
In this situation, the difference will be in the background process. It can also affect the interchange cost for the transactions. When the customer enters a PIN for the payment with debit cards, the payment will be processed under the Debit network. However, signature authorized payments are run through MasterCard, VISA, American Express, or Discover. Due to the different networks, the rates for the different type of authorization may differ as well.
In general, the PIN authorized Debit cards are comparatively less expensive as the interchange rates are in favor. So if you are looking for a credit card processing machine, I’d suggest you get one with a PIN pad so that your customers have the flexibility to use a PIN instead of a signature.
The cost of processing EMV chip cards
The initial cost of processing an EMV chip-enabled card is almost the same as running the magnetic stripe cards.
Your interchange rates are the equivalent for comparable cards, however, that doesn’t really imply that your general expenses are the same. By tolerating EMV consistent cards, you’re sparing your business from the potential danger of being at risk for fake transactions – conceivably sparing you millions! Moreover, few payment processor providers make you pay the “EMV Non-Compliance” fees. Over the long haul, accepting the EMV cards is the best decision for any business.
Conclusion: Just because you don’t understand an update or advancement doesn’t justify not trying it at all. You know better that every invention, advancement or discovery is to make your life easier. So you should give it a try and figure out how the update or advancement can help your business and life.
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