Verifone certification issues

verifone chip and pinBy Shan Ethridge, VP and GM, North America Financial Services Group, Verifone

Regarding SMBs that may think that they don’t need to worry about EMV…

It’s apparent that many SMBs believe that, because of their size, they don’t need to worry about EMV readiness—or that EMV migration doesn’t apply to them. This reflects a major gap in awareness and understanding out there in the marketplace.

As an industry we need to look at the effectiveness and robustness of efforts to educate this market segment on the impact of the liability shift and, just as importantly, how consumer expectations will shift when they get used to using EMV at major retailers.

Verifone doesn’t deal directly with SMB merchants, but we’re working with our processor and acquirer partners to provide as much education and training support as they need to close this awareness gap. There’s a big disparity between larger retailers and smaller retailers, and partly that reflects the fact that larger retailers have dedicated personnel, and because of their sheer size they’re able to draw support from their service providers. But how do you replicate that at Joe’s Pizza shop? Everybody involved in the payments value chain needs to focus on bridging that gap.

SMBs need to understand the impact of the liability shift. If they don’t meet EMV requirements and card fraud takes place at their locations, they could be left holding the bag for the full cost of the fraud. Merchants only have to look at their charge back rates to see how much that could damage, or in some cases bankrupt their business.

The biggest threat to EMV…

I think anybody in the industry could tell you that the biggest problem with EMV right now is the looming certification bottleneck. And the biggest part of that problem is the issue of certifying individual POS solutions.

Essentially, EMV drastically upsets that certification apple cart with processors today. Right now, each POS integration requires a separate certification.

So, for example, if you’re a processor that has customers using POS software from 200 different solutions providers and an estate of 8 payment terminals, that amounts to 1600 different certifications.

And, those certifications will typically take 4-6 months. So, you do the math, if a POS solution provider is just starting to think about EMV certification, there’s likely no way they’re going to be ready for the liability shift deadline. Also, recertifications that will be required when any changes are made to those software solutions.

We think the best approach is to isolate the payment data to the terminal, that way you don’t have to certify each and every POS integration.

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