Retailers Will Risk Fraud Loss If Not EMV Compliant

Provenco Payments, a subsidiary of Provenco Group, is urging retailers to plan upgrades for their EFTPOS terminals and software now, or risk losing customers and revenue.

On the back of global EMV (from Mastercard and Visa) credit card security standards, New Zealand retailers’ EFTPOS terminals need to be compliant by January 1, 2006.

Under the new security standards, all credit and EFTPOS cards will contain new chip software, similar to a small computer. The chip software has more security features than the magnetic strip, making it virtually impossible for fraudsters to take data and clone cards.

Provenco Payments CEO John Tait says EMV is a key step in the global fight against plastic card fraud and retailers cannot afford to wait to upgrade.

“Planning is crucial and it is important that retailers know they need to make the switch so they don’t get caught in a back-log waiting for their upgrade next year. Banks will no longer pick up the risk from non-compliant terminals after January 1, 2006,” he says.

Tait says the new chip-based cards will have the ability to hold more information, eventually giving retailers the opportunity to develop their business using initiatives such as loyalty programmes.

Provenco Payments has been working with a UK-based provider of software solutions for card payments, The Logic Group, to gain insights into how EMV can be better implemented in New Zealand following the UK’s successful migration from magnetic strip cards to EMV based payment cards during 2004.

The Logic Group, director segment sales, Alison Greensmith, says EMV compliance is a global mandate in the bid to stop millions of dollars being lost to credit card fraudsters. Copying cards or skimming, is effectively wiped out with the move to new chip cards which are practically impossible to copy.

“In the UK, over £400 million was lost in 2003 from fraudulent transactions and this was on course to increase to £800 million in 2005 if EMV had not been implemented,” she says.

Greensmith says it’s important for retailers to plan their upgrade early so they can ensure they have the right solution for their requirements.

“I recommend retailers contact their terminal suppliers well in advance of the January 1, 2006 deadline, to ensure there is time to choose, develop, integrate and certify the best solution.

“In the future we’ll see more development of terminals and technology for different retail environments. For example, in the UK, wireless terminals have been developed for the hospitality trade using Bluetooth technology. Customers will be able to pay at the table and their cards will never be out of their sight,” she says.

ENDS

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