Is My POS Terminal Chip Ready? (Questions You May Want To Ask)

Point of Sale machines have been used in business for almost more than 20 years at the point in time.  Up to now, the actual physical terminal has undergone very few physical changes.  With the exception of different functions, software, applications, the actual physical terminals themselves have had no massive difference or change in the hardware….until now!

In more recent years the “black stripe” had become a bit controversial.  What system engineers and designers thought to be a flawless design or method of securing customer’s private information, had become compromised.  With every new technology, comes with it a way to “crack” the code so to speak or “hack” the system.  The black stripe method was not impervious to these scams.  The security risk came about as dishonest merchants or fraudsters gave into the easy opportunity to track cards and use them for profiteering.

They had software in combination with this that would track the sensitive information, leaving it open to forward all kinds of charges to credit cards resulting in quiet a bit of stolen monies in any one case.  As a way to combat this, the credit card companies have incepted “chip” technology in all of their cards.  Obviously, the hardware needed to be updated to accommodate these cards.

Chip card technology is very new, it is not yet secure enough to be incepted across the board, industry wide, why my own chip debit card has been “compromised” twice and I’ve only had it less than 4 months, so they are still working out the “bugs” in this new technology. The companies providing the hardware for these terminals were and right on board from the time the banks issued chip cards; they also issued terminals that were chip card ready.  The physical hardware is a very small change, simply added a slot on the machine so people can “dip” their cards, which the banks very much supported because at the same time they initiated chip cards and the machines to accept them, they also raised the rate to the merchant to accept chip cards, so naturally, the credit card and bank people issued more chip cards to their clients.

If you already have a terminal, the best way to determine if it is truly card ready is to call your provider and confirm this capability with them.  Allot of Iso’s and member bank supported processors do not have the software capability, however with all the security measures of chip cards not yet finalized, iso’s are in no rush to compromise the safety of their merchant’s customers.

Another way to tell is to simply look at the terminal itself, if there is the chip slot physically, and then chances are one would be able to accept the smart cards.

The full inception of smart card technology is not fully expected to take over industry wide until about 2015.  Until that time chip cards can still be swiped, and some manufacture models are able to accept the “dip”.

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Matthew Hunt has been helping small businesses get set-up with Canadian Merchant Account Services since 2007 and helped 1000's do so. Join Matthew on Google+.

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