Benefits of chip compliance

Due to the fraudulent incidents associated with credit card, a new program is implemented for the convenience of merchants to eliminate and control fraudulent purchases. With the help of this new technology, a new chip is inserted in the credit card to avoid swiping of the cards. Instead of a card with a magnetic stripe authorized and swiped by a signature, the chip card is inserted at the terminal where it is kept for the PIN to be entered. This PIN is a secret numeric password with the help of which the user’s right to the card is authenticated.

     What Is Chip Compliance?

     This new technology with implanted security microchip in the credit card was first used by Visa and MasterCard in Europe and this technology is now being implemented in Canada where the credit cards with magnetic strip won’t be accepted any longer by the merchants by the year 2015. It is necessary for the merchants to switch their terminals to the latest chip compliance for enabling the use of chip cards instead of magnetic cards. If they don’t do this, this will result in disconnection and inability of continuing transactions for services or purchases. Financial institutions are sending notices to the merchants with non-compliant terminals warning them in advance about their disconnection. Hence it is necessary for the merchants to have their credit cards terminals upgraded in order to carry out their business smoothly.

     Advantages of chip cards

     It is necessary for every agency or merchant who accepts payments by credit cards from the local corner store to the Department of Transportation to have chip compliant terminals. Following are some advantages of a chip credit card.

•    Signature can’t be reproduced fraudulently

•    Since the chip information cannot be duplicated or copied, a chip credit card offer better security

•    It is possible to store more programs and information on a chip credit card compared to a magnetic stripe

•    Unauthorized usage is protected by security programs in the chip credit card

•    The use of chip credit card ensures reduced fraud and increased security

•    The processing time of purchases is saved with the use of a chip credit card

          Demerits of chip credit cards

•    Like with any other technique or technology introduced in the field of security, a chip credit card has its own disadvantages as well. Some of the disputes associated with this new technology are as follows.

•    It is necessary to bring new chip credit card terminals; otherwise disconnection will occur making the purchases impossible.

•    There are still chances of fraudulent transactions, if the PIN is known to other person.

•    It is difficult to prove fraudulent purchases especially for services/purchases in foreign countries.

          Canada has certain excellent merchant services which are very useful to small businesses with the purchase of chip credit card machines, minimizing the existing costs, payment processing fees, and any other worry that may confuse or obstruct the business owner. When a merchant account is set up with any of these service providers, guidelines and information is provided by the service providers in a cost-effective manner for the business. The service providers also help to prevent any kind of obstacles because of out-dated information, thus making the switch easier.

          Most of the merchant services also offer chip-ready credit card terminals which a business owner can lease or purchase and this is the most favorable option. The solutions for credit card processing are offered by these service providers that best suits the budget as well.