Swipe, dip or tap. How to take credit card payments
Just a few years ago, your point-of-sale (POS) terminal only accepted credit cards by a single method: swipe. But today, there are several options for accepting credit card payments at your business—and consumers are coming to expect these options at more and more of the locations they shop on a daily basis. Read on for more information on the latest card acceptance technologies.
Swipe: Traditional magnetic stripe cards
Of course you’re familiar with accepting credit cards via swipe; you’ve likely been using a credit card reader to read the magnetic stripe of traditional credit, debit, gift and EBT cards for years. More recently, retailers have been able to swipe cards via a dongle attached to a tablet or smartphone for on-the-go payments processing.
Whether accepting swipe payments on an in-store terminal or via a mobile device dongle, the transaction process—and security level—is about the same. Unfortunately, increasingly sophisticated fraudsters have learned how to infiltrate processing systems and steal data for fraudulent transactions from systems that process swipe transactions. This and other innovations in payment security have led to the development and implementation of EMV chip card technology.
Dip: EMV chip credit and debit cards
By 2015, the transition to chip card issuance and the shift to EMV-enabled terminals for retailers was well underway in the US. The chips in EMV cards are designed to help stop fraud at the point-of-sale, by thwarting the likelihood that a business accepts a fraudulent credit card. And with the shift to EMV technology comes a shift in fraud liability for transactions made in POS environments. It’s critical that you learn more about the liability shift. The shift, effective October 1, 2015, means that charges made at your store, which are later challenged as fraudulent, may come back your way in the form of a chargeback.
But first, a little bit about how chip card transactions are made. When a customer comes into your place of business with an EMV card, he or she will need to “dip” that card into your EMV-enabled terminal to complete the transaction. In an EMV transaction, the chip end of the credit or debit card remains inside the terminal for the duration of the transaction. So, the card is literally “dipped” into the reader for a period of time instead of simply “swiped” through the reader to capture basic credit card information. The EMV chip card must remain in the reader during the transaction because unique transaction information is being generated that cannot be intercepted by fraudsters or used for subsequent fraudulent transactions.
Tap: Contactless payments via NFC and the like
Paying for a purchase via a “tap” refers to contactless payment technologies, such as NFC (near-field communications), which enables many of the popular mobile wallets, including Android Pay and Apple Pay. To make a payment using contactless technology, a consumer must have a smartphone or device equipped with this technology, the appropriate application downloaded and running and credit card information loaded into the application. If your company accepts contactless payments, a shopper will need to simply “tap” his or her device against your contactless terminal to exchange transaction data.
While you’re upgrading your systems to accommodate EMV, it’s a great time to consider buying a system that also accepts contactless payment types. No additional fees are passed off to merchants and NFC payments are substantially growing in popularity among shoppers of almost all demographics today.
Payment technologies for your business
Consider investing in a POS system that accepts all credit card payment methods—swipe, dip and tap—to capture the widest group of potential customers. Or, depending on your business and customer type, accepting traditional swipe and EMV chip cards may be enough to meet your needs.