A Little Confusion…

credit cards, PayPal, Square
image copyright Martindale Artworks

I am sure by now if you are here in the United States you have probably heard about the new credit cards called chip cards that everyone was supposed to have by now.  And most folks that I have talked to don’t.  And, today was the deadline to have them.  And, many retailers are not even set up for them anyway, another deadline not met.  Sounds like a mess, especially if you are a small business trying to figure out how this might apply to you.  So, what’s a small business to do?  Neither deadline has been met, but don’t panic, it will work itself out.

I will try to give you some information to the best that I understand it.  First, today, October 1, 2015, was the deadline for all merchants, large and small, to have switched over whatever mechanism they use to accept credit cards to a new chip card reader (EMV or contactless are a few of the names), and, for the new chip cards to be in the hands of consumers.  The credit card companies are getting the cards out, which will help in credit card fraud.  Even if you have a non-chip card, you can still check out on one of the new devices, so don’t worry if you haven’t received your new card yet.

Second, the bigger issue comes down to the card readers.  Many large retailers are still working on getting retooled, so to speak, (this is not an inexpensive endeavor by any means, mind you) and you will be able to use your cards (both new and old) just like before.

The October 1 deadline meant that if you are a business (large or small) and kept the old card readers, if there was a problem (stolen card, etc.) with a purchase, the business would be held liable instead of the credit card company or consumer.  If you did purchase a new reader, then you wouldn’t see any change in your policy rules.  Many small businesses have not changed over yet either, but really need to look into doing so, which is where the following information may be of some help.

If you are a small business and you accept PayPal, Square, or any other payment methods, they are included in this transition as well.  I am concentrating on mainly mobile POS (point of sale) and both PayPal and Square offer new readers , called EMV and contactless, but they are more sophisticated than the old magnetic stripe swipe readers and are not free (at least up front anyway).  PayPal offers one for $149 with a $100 credit with $3000 worth of transactions in the first three months, so their reader is $49.  Square offers an EMV reader for $49 with a $49 reimbursement of processing fees within the first three months, making it free in the end. Even if you don’t rack up enough sales to total the reimbursement amount, just knowing you are not liable for purchases with stolen cards is worth quite a bit in and of itself.

Here are comparisons I found on PayPal’s website regarding magnetic stripe (Mobile Card Reader) vs. chip card readers:

Mobile Card Reader

  • Accept credit and debit mag stripe payments
  • For businesses with a known customer base or infrequent or low dollar transactions
  • No setup cost
  • Connects to your phone or tablet via auxiliary jack

Chip Card Reader
• Accepts payments with mag stripe, Chip Card, NFC, or Apple Pay
• Better protection against liability for fraudulent transactions
• For businesses with many one-time customers or a higher exposure to fraudulent             transactions
• Connects to your device’s Here app securely via Bluetooth

All of that being said, do not take my word for it, as it would definitely pay for you to do some homework and see what scenario will benefit you and your business the most.  I hope this has helped you in some way, and maybe has cleared the air a bit on this issue.  As always, I would appreciate any

thoughts, concerns or corrections you might have on this!  Hope you are successful with your business and have a blessed day and please share if you know anyone who might benefit from it.  Thanks!

The information presented in this article is not intended in any way to be legal and binding advice but is merely intended to present information as I see it and make the reader aware of issues at this time.

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