MasterCard and Visa Just Took Some of the Headache Out of Chip Cards

by Sarah Grotta 0

In case you missed the announcements last week, MasterCard and Visa have heard the complaints from merchants that getting EMV hardware and software tested and certified is taking far too long. Without this process, merchants cannot install AMV terminals. This is creating mountains of chargeback expenses that they would not have incurred, had the networks provided a better and faster process and allowed merchants to get EMV terminals up and running. Fortune wrote an article summarizing the implements the global networks are making to improve the bottleneck of EMV installations.

On the topic of speeding up testing and certifications:

Before merchants can turn on new chip terminals, they must also test the machines. Visa announced that it has “streamlined its testing requirements to significantly reduce the complexity, time, and cost of implementation,” while MasterCard said it would also simplify the process.

One of the ways that certifications are being expedited is by removing unnecessary features. For example, many terminals have been devised to offer off-line PIN capability which allows for PINs to be encrypted on the chip then verified at the POS without going online to the issuers’ host system. Off line PINs are a rarity in the U.S., yet this needed to be tested and certified every time, creating a much longer process than necessary.

Merchants will also see some relief on chargebacks:

Merchants that don’t verify payments using the chip are currently paying for the cost of counterfeit transactions. Visa is now saying that vendors will now be responsible, at most, for 10 fraudulent transactions a month. Counterfeit payments below $25 will also not be charged to vendors. MasterCard said it would take steps to ensure such charges to vendors are valid, the Wall Street Journal reported.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

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