Small and medium sized businesses often have to put forth a lot of capital to get started, and choosing a point of sale (POS) system is a big investment. It’s important to choose one that not only allows you to collect payments, but connect with your customers. And, if you’ve been in business for a while, no matter how well you’ve chosen your technology, at some point you’ll need to revisit and update your POS system.
With so many new technologies on the market today, how do you know which trends to follow and when to upgrade your system?
One of the biggest reasons merchants are upgrading their POS systems is the impending liability shift associated with EMV. EMV (Europay®, MasterCard®, and Visa®) is a technology for processing chip-based credit cards, which are rapidly replacing standard credit cards in cardholder wallets. Chip cards store the sensitive card information in a microchip on the card as opposed to traditional credit cards that store data only on the magstripe on the back of the card. Chip cards help protect against counterfeit fraud because they require the cardholder’s signature or PIN to complete the transaction and cannot be cloned or duplicated. Already well in force throughout other parts of the world, chip cards are expected to quickly become the security standard for card payments in the U.S.
Merchants are making the move to EMV-compliant payment processing because on October 1, 2015, U.S. merchants who do not use a chip card reader to process card-present transactions when a chip card is presented can be held liable for any fraud that occurs as a result. To avoid impact from the counterfeit fraud liability shift, merchants should be EMV certified (or using pre-certified devices) by this deadline.
As October 2015 quickly approaches, and with the transition to EMV already occurring, the time to start planning for EMV is now. We know that criminals will often target the weakest link. As others close the EMV gap and update their systems, not having the right POS systems in place may actually drive fraud to you.
Keep in mind that while EMV reduces the opportunity for fraud, unfortunately it doesn’t solve for all card data security problems, like data theft. Make sure your payment solution takes advantage of other security features like tokenization and encryption to protect card data while it’s being transmitted or stored.
EMV processing requires an Near Field Communications (NFC) enabled card reader that has EMV-compliant payment processing protocols built in. Instead of swiping, chip cards are tapped against a terminal scanner so the embedded computer chip can be read, or dipped/inserted into a terminal slot to be processed. These integrated functions are an advantage over an EMV standalone terminal.
Also fueling POS upgrades is the desire for mobile payments. As mobile payment technology becomes more widely available, smaller merchants have the same opportunities as large merchants when it comes to customer-friendly technologies. Now, even the smallest of merchants can buy a tablet, download an app, and start accepting payments—thereby replacing the traditional cash register and payment terminal.
Roughly two-thirds of merchants surveyed in Vantiv/Mercator research use POS tablets in their operations. They see mobile as a way to engage with their customers using multiple channels, and a cost-effective technology that can help them operate their businesses efficiently, with functions such as time-and-attendance tracking and daily reporting.
According to Hospitality Technology Magazine®, 42.2 percent of restaurant operators surveyed rated tableside POS for ordering and/or payment as one of the top features they’re seeking in their next POS upgrade.
Merchants like these and others who seek to upgrade to add mobile payments can also become EMV compliant in the process, killing two birds with one stone. Mobile technology requires a NFC enabled POS terminal. For example, the NFC technology inherent in Apple Pay®, Google Wallet® and other top digital wallets means merchants will need POS systems that support the NFC chip. Once they’ve upgraded their POS system, or added an NFC terminal, they can begin to accept large volumes of mobile payments in the process, building more loyalty and revenue for their business.
Even something as seemingly inconsequential as a choice in operating systems can affect your ability to accept the latest and greatest in payments and expose your security to vulnerability. Windows® XP, for example, which was launched in 2001 and is the operating system for many small to medium sized businesses, and the interface for many payment POS systems, is no longer being supported by Windows. Instead, customers are being encouraged to upgrade their PCs and their operating systems to Windows 8.1.
Replacing outdated equipment is a more naturally occurring upgrade than the two previously mentioned trends, and provides the perfect opportunity to make sure that you have the necessary technology to support EMV and mobile payments.
Choosing the right POS system
POStoday partners with POS providers who have state of the art solutions that are EMV and mobile ready, and include tokenization and encryption. For questions about EMV, mobile or replacing your outdated equipment, contact us today.