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Do You Really Need an EMV Chip Card Terminal?

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“The chip cards are coming! The chip cards are coming! By land and by sea. Organize the merchant militia!”

If you haven’t already heard, the instatement of EMV cards is imminent in the US. Suddenly all of those sales pitches from agents over the past few years (“You really need this future-proof terminal” “EMV cards are the future, you might as well upgrade now”) are beginning to sound less like pushy gimmicks and more like ignored prophecy, with your soon-to-be useless credit card machine hanging around your neck like the mariner’s albatross.

It’s not all gloom and doom, though. Yeah, a lot of merchants are going to need to upgrade soon (maybe a good time to buy stock…), but the real headache is going to be for the merchant service providers who need to make sure all of their clients are using the right equipment and convincing the clients that an upgrade is necessary. There’s a little bit of The Boy Who Cried Wolf in this scenario: We’re constantly bombarded with the upsell (Would you like fries with that?), so we’re wary of this sort of thing, especially from payment processing companies, who most of us regard as on par with used car or insurance sales reps (no offense to these professions).

But I’m here to give it to you straight. Yes, you really do need a new fancy credit card machine soon. It’s not the end of the world if you don’t start running with the rest of the lemmings right away, but you will be at greater risk for fraud liability if you process a counterfeit chip card come October 2015. Also, at some point your processing company can and will force you to upgrade, so check out some of our favorite providers so you don’t get screwed when you buy a new machine.

What is an EMV Chip Card and Why Do I Care?

For starters, EMV stands for “Europay, MasterCard and Visa,” which set out to create world-wide standardized protocols for so-called “integrated circuit” cards and the hardware necessary to accept these cards. This was no easy task, but by 2005 – almost a darn decade ago – chip cards became status quo in the EU. By 2012, Canada also joined in on the EMV party.

These cards are manufactured with a small integrated circuit (or “chip”) in the card. Payment data is read from this chip instead of from the magnetic stripe. This protects against fraud in two ways. First, the chip itself is more difficult and expensive to counterfeit. Second, the way the data is transmitted varies each time it is read, making it dynamic instead of static. Thus, while info from a magnetic stripe can be “skimmed” easily, chip information is much more complicated to glean.

While the effectiveness of EMV cards in thwarting fraud is debated (it does nothing for card-not-present fraud, for instance), this is kind of beside the point as far as we are concerned. We don’t get to decide; we just have to obey. The good news is that the EU and Canada and basically the rest of the developed world were the guinea pigs here, so the US should have a smooth transition in theory. (Is the metric system next?)

You Can’t Make Me (Right?)

So I know what you’re thinking, “Who’s gonna come here and force me to do this? I don’t have to if I don’t want to.” And, in essence, you are correct. If you want to keep on processing cards with the magnetic stripe and say screw it to the whole EMV protocol, you are currently free to do that. You won’t lose any business, since smart cards still have a magnetic stripe as a back up. You will not be fined, and your transactions will still process as usual. But there will be one incredibly important difference: Starting in October 2015, you and your processing company will be liable for any counterfeit smart card transactions. This is what they call a “liability shift.” Since having the EMV terminal could have theoretically prevented the fraud, the liability is now on acquirers and merchants (you).

The Timeline for EMV Chip Card Liability Shift in the US

  • April 19, 2013 – Maestro shifted liability for international chip cards used in the US.
  • October 1, 2015 – Visa, MasterCard, American Express and Discover liability shift for POS terminals.
  • October 1, 2016 – MasterCard liability shift for ATMs.
  • October 1, 2017 – Visa, MasterCard, American Express and Discover liability shift for pay-at-pump gas stations, as well as for Visa and AmEx at ATMs.

So, as you can see, October 2015 is the big date most merchants need to keep in mind. By that point, your processor will probably have already forced you to upgrade in order to protect itself against fraud liability.

“But no one is using chip cards, this doesn’t even matter.”

Well, that might be true today, but the times, they are a-changin. Get ready to see a massive increase in chip cards at your register as the card networks begin to implement the change.

What Should I Do About Smart Cards Now?

At this point, you should be seriously thinking about it. And I do mean seriously.

Make no mistake – you really do need to protect yourself from fraud liability. The few hundred dollars a new terminal will cost you is worth the peace of mind. However, this is America, the land where we have the right to make our own choices, however stupid, and you are also free to roll the dice if you prefer (and your processing company allows you to). After all, there is always the chance that no one will ever present a counterfeit chip card at your register. Is it worth the worry to save a little cash? If you’re Scrooge McDuck, maybe. For me, no.

For more information on buying an EMV chip card terminal and EMV compliance, check out our FAQ on the subject. Or if you feel like your current merchant account services provider is going to rip you off for the new terminal, please check out our favorite providers.

Let us know what you think of smart “chip” cards, and whether you’ll be upgrading your terminal!

Tom DeSimone
Based in New York’s Hudson Valley, Tom has written for Merchant Maverick since 2013 and currently serves as the website’s managing editor for payment processing content. His work is cited by publications including TechCrunch, Washington Business Journal, and Bank Advisor. Press seeking expert comments for stories related to credit card processing can reach him via LinkedIn for a prompt reply.
Tom DeSimone
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Responses are not provided or commissioned by the vendor or bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the vendor or bank advertiser. It is not the vendor or bank advertiser's responsibility to ensure all posts and/or questions are answered.


    My husband, artist-owner of a glass art gallery passed away Feb 2106. As the person taking over his retail business, I started getting pressure via phone calls from his merchant bank to swap out the old credit card processor for the chip style reader. Since I was pretty much oblivious to trends in credit card processing, I mostly ignored the calls and indicated that the business would be closing soon anyway, which it has. Yet, here’s the perspective that many writers never mention in articles about this changeover. What does one do with the old credit card reader? Do we really want countless machines going to landfills? In this day and age I think the manufacturer/seller should take back the swipe only machines and reuse, re-purpose and/or recycle the parts. While you may not think this viewpoint belongs in an article like this, I think that it does. There is more expense involved in this changeover than just the monetary one. We must start considering what to do with environmental waste, as a planet community, and its cost too. So I am going to drop mine at the next local electronic waste recycling event, where I hope it goes for some kind of re-use. Plus I also have the old-old style carbon imprint machine, which I’m afraid has no good reuse. Sad face.

      g. allen

      I have a small deli style restaurant where speed is very important
      I have always swiped credit cards even though I have an EMV
      terminal I do this for the sake of speed (takes less that 5 seconds
      to input total, swipe card and receive receipt were when I use the
      chip reader it takes anywhere fro 15 to 25 seconds per
      I am now being told by my current processor that as of October
      1, 2017 that my account will be shut down and my equipment
      which was purchased from them will no longer process.
      Is this going to become an industry standard or should I look for a
      new processor.
      Thank you

        Tom DeSimone


        This is the first I’ve heard of a processor threatening to terminate service due to the use of non-EMV equipment. It’s certainly common for companies to strongly encourage the use of chip-capable equipment, though. I would ask around with some of our preferred providers to see if they would be okay with you swiping into the future. My guess is that they’ll allow it, but will remind you that you increase your risk of fraud.

          Stuart Siegel

          Hi there – I am currently using Square with the chip reader, which is totally compliant, but seems to be completely buggy – half the time the reader doesn’t connect to the device. I am thinking to switch to Stripe, which means we would only be using keyed-in payments. If I key-in the card number is it still considered card-not-present even if the customer is standing there? And so am I off the hook for fraud liability?


            Tom DeSimone

            Hi Stuart,

            The situation with liability for counterfeit fraud when the transaction is keyed-in from a chip card with the customer present is a little bit iffy, but generally the industry as a whole seems to have concluded that such transactions would not leave the merchant on the hook for the money. I haven’t heard any experiences that contradict this, but I’m also not convinced that it will remain this way permanently.


              We are small business owners running about 20K/mo with ~110 transactions. While reviewing my merchant account yesterday, I found I had 3 chargebacks on the same customer. Customer service told me that he was disputing the charges because he has a chip enabled card and we swiped his card rather than using the chip reader on our POS terminal. This is correct, as we have not received the software update to use the chip reader. Reportedly, the customer claimed we compromised the security of his card by not using the chip reader and has refused payment. The rep also said that this is a new ploy – that there is a subset of society that has found a loophole due to the time delay of the EMV requirements and are intentionally making purchases and then disputing the charges. Our sales rep is not returning our calls, nor is our merchant provider (CardConnect) giving much help (BTW, we’re leaving them). Though we don’t document the drivers’ license info, we look at each one and compare it to the name on the credit card – these were legitimate purchases. I’ll be completing Dispute Notification forms today. It astounds me that a process that was put in place to protect the consumer has, in this case, turned around to defraud the merchant. Do you see any way that we can protect ourselves until the conversion is completed?


                Definitely a type of loophole. There are a couple of recourses available: First, you can just accept it as a sunk cost and refuse service to that client. Second, you can informally demand your products back or client can face legal action like small claims court. That usually spurs people into action to get things corrected pretty quick.


                  Hi Tom,I run a bar that uses Aloha POS, Aloha has not updated the equipment yet to me EMV compliant. Thus I keep getting large charge backs that i can not do anything about because I don’t have a chip reader on any of my 7 Terminals. This is costing me thousands of dollars a month and Aloha has no time line on when the changes will be made. I tried using a stand alone terminal but it is not compatible with the POS so it is almost no use to me. Am I the only person having these issues? Is there anything I can do to fight all these charge backs? Good read BTW..

                  Thank you,


                    I work for a very small non profit in North Dakota, we process cards about 3 times a year at our major fundraisers. So from my understanding if we do not have a chip reader and some fraudulent activity happens its our fault is that correct. Since we do not process many cards would it be necessary to upgrade our credit card swiper?

                      Chloe Bahal

                      Hi Emily,
                      Yes, you are correct. If the card being used has a chip and it turns out to be a fraudulent transaction, you are held responsible. It is always safer to use the EMV compatible swipers, even if you don’t have many transactions.


                        I’m selling home made products at craft shows and have used a well known card reader in the past years. This past year the card reader company said I’ll need a reader with the emv. If not I’m responsible for fraud liability. What exactly does this mean? If I swipe a chip card do I just lose my sale monies? Or is more involved than I think? My most expensive items are $55. Please help and thanks.

                          Chloe Bahal

                          Hi Sue,

                          That’s a great question. Basically, there are 4 possible scenarios in the case of a fraudulent charge:

                          1. If you do not have an EMV reader and the card does not have a chip.
                          – Who is responsible: The bank

                          2. If you have an EMV reader and the card has a chip.
                          Who is responsible: The bank

                          3. You have an EMV reader and the card does not have a chip card.
                          Who is responsible: Whoever owns the card

                          4. You do not have an EMV reader and the card has a chip.
                          Who is responsible: You, for the entire transaction, and the risk of chargebacks.

                          I would recommend this article for more information.


                            Hi, We are hotel owners. The guests make reservation on line by putting cc number, exp date CV number, address etc. As per our policy, we charge them by manually entering cc numbers. If they come for check in and the cc is already charged, can they charge back later? Usually we id guest by license and take license number, exp date date of birth etc. How are we protcted as far as on line transection?

                              Chloe Bahal

                              Hi Sheena,

                              Beyond chargebacks, you should be very careful with how all of that card information is stored and transmitted. Collecting card information for manual entry later can be a disaster waiting to happen if it’s not PCI compliant. If the card information is compromised, you could end up owing a huge amount. In terms of chargebacks, the customer can always initiate a dispute even after the transaction clears, even if the transaction was legitimate. But, if you are collecting all of that identifying information, then you have a very good chance of winning the dispute and ultimately getting paid.

                                Dennis Hartman

                                So, my question is since the banks are the ones who are worried about safeguards, why do WE as small business owners have to fully pay the full costs. They still make the money and we have a monthly charge to lease the new machines. SOMEthing stinks here. Where is the class action law suit against this rip off???

                                  Lari Tiller Howell

                                  If someone comes in with only a mag strip card, is it advisable to sell to him or not?

                                  Is there any institution that has not yet issued chip cards?

                                    Chloe Bahal

                                    Hi Lari,

                                    If you have an EMV terminal and the buyer wants to use the mag strip, you will not be responsible for any potential fraud charges. Many institutions have not issued chip cards nor have replaced anywhere near 100% of issued cards with the chip cards yet.

                                      Mary Sutherland

                                      In a business that has full service there is usually a two step process to finalize a bill and just curious how others that have switched to the EMV are handling this? If so how is it working for you?


                                        Hi I work at a restaurant. On the old mag strip terminal the customer has a choice of debit or credit. A lot of times children/ close friends/ coworkers/ parents will bring in a card. I run it as a debit because they have a pin. With the EMV there is no choice it may or may not pop up as a debit. I don’t know until I run it. (I found this out after a regular customer who uses his mother debit card didn’t allow him to enter a pin it just printed out as a credit card slip). They say we are not suppose to ask for id just match the signature. Well if you already ran the card and they sign it and it doesn’t match then what? Can someone address this issue. I think it should be just chip and pin not chip and signature. There are just too may people who share cards and then get upset when we tell them you can’t sign using someone else card. If you have any suggestions please write I would really appreciate it. thanks


                                          Good article. It’s common to hear the following: “The Chip readers are relatively inexpensive, so why not upgrade?” Well, we are a small company. Chip readers will not integrate with our current POS system and processing software. That means upgrades all around, including new, expensive POS software which requires new, expensive service contracts. I am sure the genius programmers and designers could have come up with a way to read and verify the chip and then spit out the info to the terminal in a way that all current POS systems would be able to understand. I would have gladly transitioned by now if it were not for the headache of purchasing, installing and working the bugs out of all the new software.

                                            Bryan Blake

                                            I work for a company who sells the EMV terminals. This process will change for everyone. The Merchant who feels they are being forced into doing something they do not want to do. The customer who is visiting the location and who is paying for the goods or services. Unfortunately there is no way of avoiding this inevitable payment change and everyone will have to be happy with it, even if they are not happy.

                                              Sue James

                                              We work in a busy bar and are using the Vx520 terminal. When a customers card was swiped through the machine via the Mag stripe, a receipt was printed out and given to the customer who signed it, they subsequently added a tip which we would then adjust at the terminal. With the chip cards we have no way of doing this, the ONLY way we can now get a tip is by asking the customer in advance!! And try to explain WHY we now have to do this to each customer on a crowded weekend is just plain crazy! Supposedly the Vx520 is waiting for an update but we were told this would originally be fixed by May, now its pushed back to September. Does anyone have any similar experiences or ideas on this? Thanks so much!

                                                Bryan Blake

                                                Tip adjustment was an issue across the board when considering EMV, but not any more. Tip Percentages can now be added depending on the evolution of the company who sold you the terminal. I’ve seen some that offer tip percentages to be added to the check or the ability to enter the tip amount you would like to give.

                                                  KEVIN HAYES

                                                  My current terminal is not EMV-Compliant (waiting on compliant processors to be produced). I understand that I am liable if I swipe an EMV-Compliant card. Am I also liable if I key the card in. I have been getting a few chargebacks from customers claiming fraudulent purchase with the chip card. I don’t want to stop accepting chip cards while waiting for the new processors. Can anyone help?

                                                    Chloe Bahal

                                                    Hi Kevin,

                                                    Keyed-entry payments are technically processed as card-not-present payments, and are thus not subject to the new EMV chip card regulations regarding liability for counterfeit fraud.


                                                      Are you checking I.D.’s and getting a signature? If so, what’s the issue?


                                                        Hi Brad, thats not exactly right. A signature and ID helps but the liability shift is directly related to EMV equipment and chip cards. If the customer comes in and there is a chip in the card and its not chip read and the customer is savvy fraud they can burn you. If your current provider hasn’t offered you an EMV solution you need to move. Merchant Maverick is an amazing site for information and you can review our site for more EMV and PCI compliance info as well. Good luck. Oh one PS too, asking for ID is not legal unless the customer has not signed the back of the card I know a lot of companies do it but you are supposed to match the signature up with the one on yhe back of the card first then ask for ID if it doesn’t match or there is no signature. Just a little FYI.


                                                          Cass, I understand the liability shift is associated with chip cards and EMV equipment. My point is that a chip card and signature is less secure then a chip card and pin. A chipped/signature card can be lost/stolen and then used by anyone. Not so a chipped/pin card. A lost/stolen pin card is of no use without a pin. The EMV companies did the public a disservice by not going directly and exclusively to pinned chip cards. I understand the reasons they didn’t but it’s BS to say you’re trying to improve security and than leave a gaping security hole. Re: asking for I.d.? So sue me. If you understand the security hole left by the Chip/signature option, asking for I.d. is the only way to protect the merchant and the consumer. Personally, I thank sales clerks for asking for my I.d. when I I charge on my chip/signature cards.


                                                            Stacy Renfrow

                                                            Do I need a dedicated extra line now that I have the new chip card reader?


                                                              I just got a call from Wells Fargo trying to get us to upgrade to new machines so we wont be charged for fraudulent transactions. Were similar to a doctors office so we rarely have chargebacks, I say rarely as I’ve been here for a year and never seen one, but I wont say they’ve never will happen. Unfortunately in the year before I got here they decided to purchase machines for all our locations (30). She said we don’t have to upgrade if we want to take on the risk but then was mentioning we will need the keyboard addition. I said so wait you’re saying we wont be able to slide the cards with chips anymore? She said yes, but I’m still confused. Can we or cant we still slide a chip activated card? and if not when is the date this all changes? Anyone know? I just am wondering if anyone knows the answer as I’m not completely trusting Merchant Services. Thanks

                                                                Ed M

                                                                This whole thing makes a little sense to me. So define credit card fraud and tell me how this helps “john q public.” Furthermore, educate me as to how this helps if someone steals your credit card, since most retail clerks rarely if ever ask for ID. Personally, I’m very careful about the use of my credit cards. For example, I’m a bit uncomfortable giving my card to a waiter at a restaurant and they disappear with it for awhile. I just don’t understand how this “new card technology” helps the public.


                                                                  Helps prevent break ins to processing of CC machines. Ex: Target.

                                                                  It also helps prevent skimming, Google that.

                                                                  Most fraudsters are not the lady at the restaurant taking your card, it’s the people who do it almost as a living for themselves. This helps prevent stop those type of people.

                                                                  People can still write down your card information and use it assuming it is accepts by whoever they’re using it on.

                                                                  There are different measures that have to be taken to prevent that.

                                                                  Thank you,

                                                                    RICK IVES

                                                                    The Smart Card alliance developed the website to help those involved with the payment card industry which includes retail merchants to better understand EMV migration. EMV-Connection has published a white paper “Understanding the 2015 U.S. Fraud Liability Shifts” that should be required reading for all retail merchants. Look at the first table which states who is responsible for fraud, the issuer (credit card company) or the merchant (the store owner) after October 1, 2015.

                                                                    My interpretation of the this is that a merchant is only liable for a fraudulent credit card if the magnetic stripe includes data copied from a chip card, a rather sophisticated and in my opinion rare type of credit card fraud.

                                                                    My conclusion from this is that for the past 18 months the payment card industry has perpetrated false warnings to retail merchants that they must have EMV terminals installed by October 1, 2015 or be held liable for fraudulent credit card transactions that may occur in their store.

                                                                    I welcome intelligent rebuttal. I am really trying to understand if the fraud liability shift as stated by the processors is correct over way over blown.

                                                                      Scott Lorts

                                                                      Actually no, the most common type of cc fraud come from data breaches. POS Terminals etc, those cc numbers are re coded onto blank cc’s and sold on the black market. If one of those is used at your store which is not EMV capable, you assume the liability if the stolen card data was a chip card. If it is swiped at an EMV ready machine, the data will tell the terminal that the card is chip enabled, but because the card has no chip, the merchant will know immediately it’s fraudulent.

                                                                      Hope this helps
                                                                      Scott Lorts
                                                                      Heartland Payment Systems

                                                                        Bob Jacobs

                                                                        Some great info here, but damn, what a complete nightmare for local merchants like myself…push the problem down from the banks to the credit card companies to the merchant processors and stick the liability firmly in the laps of the smallest fish in the pond, the local proprietor trying to earn a dollar or two…PAIN!!

                                                                        We purchased 2 First Data units that are chip compliant and yes, they are VERY frustrating to use because a) they don’t interface with my existing Aloha system so we basically have to enter transactions twice and b) they don’t allow a “clean” transaction the includes the tip amount (had to have this custom programmed). Also had to have an Ethernet run to even accommodate the machines which was an unexpected cost of having the chip compliant terminals.

                                                                        Here’s my question; based on the nature of my business, we have a need for a wireless terminal. I am now being told that there is no such thing as a wireless terminal that’s chip compliant, so I am stuck with risking fraud. I will check your listing of vendors, but are you aware of any mobile terminals that are compliant??




                                                                          I currently work with OpenEdge and noticed your comment while browsing through. Most EMV readers out there will be WIFI compatible. To be specific, the product you will be looking for is a FD130. You will then be able to process all your transactions through your business wifi.

                                                                          I hope I helped you a little bit on your question.


                                                                            Scott Groves

                                                                            To comment on your issue about needing Ethernet cables run to use it the EMV readers. Adding Ethernet to various locations within your business can be accomplished with very little cost. Look at options such as Ethernet over electricity which use your existing electrical plugs as a method to transmit Tcp/ip over the electrical plugs. I have seen these modules as low as 30 US dollars. I would suggest this over wireless options


                                                                              Yes there most certainly are! I used to sell them!



                                                                                Very good write up, enjoyed it very much. I’ve been trying to find something on the web that compares the risk of liability shift between the POS system and an ATM for merchants. I don’t think people understand the liability differences. On the POS model, you are standing in front of a person using your card, then signing or entering a pin, and even potentially showing ID before the transaction occurs. For ATM owners, the machine is typically tucked back somewhere in the store where someone could potentially make fraudulent transactions and the merchant would be liable and not have any idea of what was going on. Are you able to provide your thoughts on the major differences between the two (minus the physical date difference), and what the potential risk could be for both POS and ATMs?

                                                                                  Tom DeSimone

                                                                                  Hi Scott,

                                                                                  A major difference between the two in the immediate future is that the ATM will always require a PIN, which in and of itself makes the transaction way more secure both in terms of counterfeit fraud and theft fraud. The chip really only prevents counterfeit fraud. Assuming the fraudster has a counterfeit card with a broken chip plus a working PIN, then it’s a fallback issue that the issuer will be responsible for. To read more about EMV fallback, especially as it pertains to ATMs, read this. Honestly, we still don’t know how ATM and unattended fuel terminal EMV liability will be handled in the US.



                                                                                    Valid points. I’m wondering though with the pin hole cameras with the skimmers, it gives the fraudster the ability to duplicate cards and use pins for said card. Wouldn’t the merchant who doesn’t upgrade their ATM with EMV be more at risk because of the potential fraudulent activity that would ultimately fall back on them? I would think it would be much more difficult to reproduce the EMV cards, correct? Wouldn’t there be less fraudulent attempts in a face to face situation – I would think it would deter someone from trying to commit a crime when there is a good chance the store would ask for an ID? And wouldn’t the potential risk be smaller because of the smaller transactions at a merchant store? Typically with larger trans, they ask for your ID.

                                                                                      Tom DeSimone

                                                                                      ATMs and other unattended terminals definitely have a greater risk of fraud for the reasons you’ve identified (no human authentication methods such as inspecting the card and ID), plus the instant liquidity of cash from an ATM is ideal for thieves. When the ATM liability shift occurs, it will be a very good idea to upgrade in order to avoid the most liability possible (basically to keep in line with current liability). It is much more difficult to counterfeit chip cards with working chips, which is why it’s a much more secure authentication method, especially when coupled with a PIN.

                                                                                      POS systems are absolutely at a lower risk for counterfeit fraud and theft fraud than unmanned terminals/ATMs, both before chips and after them.


                                                                                        Besides instances of hacking into a merchant system, does this chip protect from anything else. I understand if it’s stolen it can still be used if the merchant doesn’t use proper ID protocol to ensure that person using the card is the owner.

                                                                                          Tom DeSimone

                                                                                          Data security is improved with chip cards, but mostly they are designed simply to prevent counterfeit fraud.


                                                                                            Just a quick question… As a small business owner, I am implementing the EMV suit next week. Do I still need to instruct my staff to check ID? That’s really the only sticking point I’m at. The device seems workable otherwise.

                                                                                              Tom DeSimone

                                                                                              Hi Lisa,

                                                                                              The chip is meant only to ensure that the card is authentic. Since no PIN will be necessary with most chip cards, it does nothing to prevent the use of stolen cards. So it’s still just as important as ever to make sure that the person using the card is the owner of the card, and checking ID is generally the most effective way to do that.

                                                                                                Danny Layton

                                                                                                How can we invest in the chips?

                                                                                                  Chloe Bahal

                                                                                                  Hi Danny,

                                                                                                  You can go ahead and contact your merchant provider and they will be able to give you more information on how to get set up with an EMV Chip Card Terminal.


                                                                                                    Great review and comments here. My experience has been fantastic since I switched to EMV. Previously all transactions were swiped via our Clover station and processed as credit. Since the change, we are now able to process as debit with PIN. A good 50% of my customers use debit vs. credit cards, which has saved me significantly in monthly processing fees. The FD40 Pin Debit readers were only $175 each. For those that are interested, I’ll be reviewing the Clover station in the POS section for your reading pleasure. Thanks.


                                                                                                      Tom. I’d amend your statement to say that chip-and-*PIN* transactions reduce fraud. Chip and signature doesn’t do much in that regard (it protects you only against somebody re-recording the stripe or physically modifying the card, but that’s it). So, what’s really going on here is that the CC issuer is moving the fraud problem onto the merchant’s shoulders without doing the one thing it could do to really fix the problem: go to a full-blown chip-and-pin system. The whole chip-and-signature thing is just a dumb half measure that provides no real security.

                                                                                                      Chip-and-pin works without either the PIN or your credit card number going across the internet, so something like the Target breach just couldn’t happen. Once people understand that, it will be your customers who will be getting aggressive about getting you to switch, not the processors.

                                                                                                      I should also point out that, if you’ve ever been to Europe, where chip-and-pin is the only option, that it’s a revelation for the consumer. It’s way easier to use than anything that requires a signature (and is way more secure). Get a pint in a pub, they hand you the machine and go help another customer, you put in your card, enter the pin, and walk away with your beer. Easier for everybody, to the point that I’m annoyed when I have to sign something.

                                                                                                      Finally, to put things in perspective, Paypal charges $149 for their chip reader (which also handles NFC transactions like ApplePay and has a keypad on it for entering the PIN). Square’s basic chip reader runs $29 (with the UI entirely on the phone). Both of them charge about 2.7% per transaction. If you’re comparing a stand-alone wireless machine to a phone-based one, you need to factor the cost of the phone and the phone plan into the equation as well.

                                                                                                        Tom DeSimone

                                                                                                        Hi Allen,

                                                                                                        I agree. Chip and PIN cards prevent not only counterfeit fraud, but theft fraud as well. The US is going to transition to chip and PIN, make no mistake. The chip and signature cards are just a stepping stone as the infrastructure is established.

                                                                                                        The card networks are only passing on liability for circumstances where a tech upgrade could have prevented the fraud on the merchant’s side. So if someone uses a stolen chip and signature card at your business, you are NOT necessarily liable, because no tech upgrade on your part would prevent the fraud. If someone uses a stolen chip and PIN card at your business, and you do not have a PIN pad, you will be liable because the tech shortfall was on your end.

                                                                                                        The chip’s purpose is to ensure the card is genuine by making counterfeiting very difficult. It does nothing to prevent other kinds of fraud, and therefore the chip alone does not shift liability for other kinds of fraud. The PIN will help to prevent fraud via theft, and therefore those cards will shift liability for that variety of fraud as well. Neither of these will prevent card-not-present fraud, so there is no shift there (for now), no matter what.

                                                                                                        Note that PayPal’s reader requires a Bluetooth connected smartphone or tablet as well. It does not work on a standalone basis. The cost of a dedicated phone or tablet, plus a service plan if necessary, would absolutely be factored into the cost if a dedicated device will need to be purchased. But many POS systems relying on countertop terminals are already tablet based anyway, and many small mobile businesses have no problem using a personal phone to process payments in the field. Note that wireless credit card terminals cost $600 – $900, plus the cost of a monthly data plan, so it’s pretty pricey either way. But given the cost of thermal printers and NFC-readers, a traditional countertop device is often the least expensive option if these features are needed and no mobility is required.

                                                                                                          Ashern Esso

                                                                                                          The Debit Mech. stopped reading the chips on debit cards after I switched the two opposite tills any one know why it wont read debit but work for credit?


                                                                                                            We have a small business and provide in-home shopping for all of our customers. That being said, we only do credit card transactions that are manually key entry. The sale is made in the home, the old knuckle buster is used, the card slip is brought back to the office and manually entered. It is via a hardwired telephone line using a Verifone Zon Jr XL. This machine and system has always worked quite well and I believe that using the internet would be more of a risk. What can we do to become compliant with these new regulations? I have no idea what type of machine would work best for a mobile in home business like ours. From what I have seen so far the leasing would end up costing us around $1200 for a new machine over 48 months. Please help! I am looking for information to send us in the right direction. We currently use First Data Merchant Services and own our machine. Thank you for your help!

                                                                                                              Constance Underfoot

                                                                                                              So if you’re a company that is 100% phone order anyway, the answer to the question if you need a new machine is 100% no right?

                                                                                                                Tom DeSimone

                                                                                                                Correct. If the card is not present, then the chip wouldn’t have helped to prevent the fraud anyway. Therefore, you don’t have any new liability.


                                                                                                                  Just an update on my own conversion to EMV. I started working with First Data my current processor in June for a replacement machine. The FD sales guy put the hard sell on me, but left me unmoved by his $620 terminal price. I told him I would likely leave and requested a rate review. 5 weeks later, no review, no nuthin from FD. So the next time I called, I asked for a supervisor, who did a rate review with me on the phone. We lowered rates and he promised to move my request for a discount on the terminal onward in the chain. 2 weeks later (about 1 1/2 weeks ago) no response from FD , so again, back on the phone. Maybe I was a little overly indignant, but after I had the agent look at the number of notes and calls I had made, without response from FD, he finally put me on with a retention specialist. After I ‘threw up’ on her for two minutes, she calmly told me that she was there to offer me new terminal, no charge.
                                                                                                                  I told her, I accept, and I apologized for yelling.
                                                                                                                  Moral: persistence pays off, and right now FD, if not all of the processors are overwhelmed with the transition, and they may be a little more amenable to persistent action by merchants!


                                                                                                                    I’m confused as to why you would want to do business with a company that you have to chase around and harass to get results? Especially First Data, a bank ran platform and company? Should have been your first sign things aren’t right. They will get their money back for the free terminal in hidden and padded fees for sure. Also they probably locked you into a term agreement in small print with your signature for the new terminal… Be very aware of the information you are listening to about EMV cause it is a mess, even for the industry leaders and it’s a ways from being fixed.. Get a new provider quickly and run from First Data. I would rather give a company more profits over a lifetime of transactions and charge them a couple bucks for the terminal than to give them a terminal for free and hammer them on fees forever… Nothing worth anything is ever free, trust me.. 🙂


                                                                                                                      So….with my last purchase (pre-emv) of a terminal, I made sure I was on a month to month agreement, and when I inquired about termination fees in my last ‘go round’ for emv conversion I was assured that since I owned my machine there could be no early termination fees as they have no cost recovery to consider. Likewise, with my new FREE emv machine, I signed the contract, ‘for purchase only’ even though I had been assured it was a free terminal.
                                                                                                                      I have never been charged any ‘hidden fees’… I review my statements periodically (for all periods since my last review) and I have never seen a charge that i couldn’t explain. I’m not a shill for first data, and while I have had small issues with first data…typically things are resolved. Even though, I had to spend about 5 phone calls to get resolution on my terminal, It was still not longer than an hour of total elapsed time. I knew 100%, that it was going to take cajoling to get a price reduction from the retail price being offered for my emv terminal from first data. I was prepared to make multiple calls from the start of my earliest conversation. I was only slightly surprised at the foot dragging that I endured, and at the end of the day, I was prepared to pay $250 or so for my EMV terminal. I have to say that I was actually ‘delighted’ when i was told I would get the terminal for free. Over the duration of my time with first data, with regular requests for rate reviews, I have lowered my average transaction cost just from over 3% 4 years ago, to about 1.9% currently. The cost of change to me is more costly than the potential ‘couple hundred’ savings I might get by going with a second tier processor. At this point I am satisfied (if not ecstatic) with my provider. If I could get rates yielding an average 1.7% or less, I might consider a change, and of course I can take my EMV terminal with me (assuming any programming requirements are also nominal).
                                                                                                                      That’s why.

                                                                                                                        Audrey Thomadis

                                                                                                                        We have a small pizza business and do not have the new terminal, yet. Our processing company is offering the new terminal for 1,200 over a four year period, or we can buy it upright for 700. The difference being that if you pay a higher price there is a guarantee on the equipment. My question is do we have to buy the terminal from them? And also we were told that if we don’t switch the credit card companies will be charging us 30 a month. Is that true?

                                                                                                                          Amad Ebrahimi


                                                                                                                          This is outrageous, but not in the least bit surprising.

                                                                                                                          1) You should never lease a terminal.
                                                                                                                          2) What kind of terminal are they charging $700 for? Most EMV terminals are $300-$400.
                                                                                                                          3) Only your processor can tell you if they can reprogram another terminal bought elsewhere.

                                                                                                                          Personally, I think it’s time you switched processors. We have plenty of higher quality vendors listed here.

                                                                                                                            Kim Miller

                                                                                                                            As the only hairdresser in our small salon that takes credit cards I just switched over to the new EMV processor. I hate it. Won’t allow tip adjustment. Tip must be entered same time as transaction. I’m not asking for a tip. I went back to the old machine for now

                                                                                                                              Mike Willman

                                                                                                                              No offense, but that is mostly your fault for not looking into the service offered by the processor. If that feature is very important to you, then you should have looked into it first before choosing (and buying a new credit card machine!!!) a company.


                                                                                                                                Hi! Good article. Question: we are a small medical practice (1 doctor, 1 office manager). We accept credit cards for payment of pilot exams. We know our patients very well. We also accept credit cards from insurance companies for payment. Do we really need to get a new EMV machine?

                                                                                                                                  Amad Ebrahimi


                                                                                                                                  You’re not obligated by law to be EMV compliant. It’s just a matter how willing you are to accept the risk. If you don’t feel you’ll never have to face any type of fraud, then you can make the choice to pass on this whole EMV thing.

                                                                                                                                    Eric Thomson

                                                                                                                                    Thanks for the clarity on EMV. My situation is such that I’ve been considering going to PayPal Here as a sole provider. How will the mobile methods be affected by the EMV migration? Will they be able to provide a liabilty-free solution? Thanks (hopefully you haven’t already fielded this question).

                                                                                                                                      Amad Ebrahimi


                                                                                                                                      We’ve written a great article about your exact question. I think you’ll find it helpful. 🙂

                                                                                                                                        Virginia Pledger

                                                                                                                                        I am a small business that does not have the credit card online, it is thru telephone access only—would a chip card be needed if I am not using the internet?

                                                                                                                                          Amad Ebrahimi


                                                                                                                                          No. Chip-and-PIN only applies to face-to-face transactions. Online transactions are considered “card-not-present” and will not be affected by the new EMV rules.


                                                                                                                                            RE: Virginia’s question on September 21, 2015
                                                                                                                                            I’m confused about your response. I think you misunderstood the ‘phone access’ part of the question. She asks: “I am a small business that does not have the credit card online, it is thru telephone access only—would a chip card be needed if I am not using the internet?”
                                                                                                                                            You said, “No. Chip-and-PIN only applies to face-to-face transactions.”

                                                                                                                                            All her transactions are face-to-face, run over her landline. Sooo, doesn’t she need a EMV Chip-and-Pin reader? I’m in the same situation and need this clarified. Thanks.

                                                                                                                                              Chloe Bahal

                                                                                                                                              Hi Kathy,

                                                                                                                                              What “face-to-face transaction” means here is if the customer physically has to insert or swipe the card in the machine in order to complete the purchase (think of when you go to the grocery store, you usually have to either swipe or insert your card into the EMV terminal, this is a face-to-face transaction). An over the phone transaction is just that, over the phone (think of if you order delivery food and you pay by card over the phone, you are not face-to-face), it is not physically done as though you were at the grocery store. I hope this helps.


                                                                                                                                                Got my card in the mail, it`s so dumb to force businesses to purchase these machines. The place I manage has 7 registers, just at my location, there are over 100 locations in USA. We are not Wal Mart, I believe if they are forced to switch the only way to cover all locations is mass layoffs and raising prices. This will be a trend forcing many more to shop online.

                                                                                                                                                  Mike Willman

                                                                                                                                                  If they have 100 locations, then they should very easily be able to manage the transition. Hell, they can probably get their processor to do the upgrade for free/close to free.


                                                                                                                                                    I am a doctor, and have credit cards keyed into a tokenized internet based system/terminal. If a customer pays with a chip card that is keyed in instead because I do not have a chip card reader, am I also ultimately responsible if it ended up being a fraudulent transaction? Can you recommend any sites with documents that delve deeper into this issue?

                                                                                                                                                      Amad Ebrahimi


                                                                                                                                                      If the data is being encrypted via your virtual terminal, then you are off the hook. It will then be considered a card-not-present transaction even though it’s a chip card. Unfortunately I don’t have any resources to point you to, but I believe I answered your question.


                                                                                                                                                        Cheryl M

                                                                                                                                                        I use Elavon for card processing. After we installed the new EMV terminal and pin pad, we have discovered that DEBIT CARDS THAT HAVE EMV CHIPS IN THEM can only be ran as signature debit (which basically makes it a credit transaction) The machine will not ask for a PIN. Bottom line, on a $400 transaction instead of paying $.30 to process that payment as a debit, we now have to pay over $6 to process it as a credit card. So far we have only seen EVM Chip Debit cards issued by larger banks (Bank of America and Chase) our local banks have not issued debit cards with chips in them as of yet. Our processor is telling us that these chip cards are not capable of accepting PIN numbers and won’t be for some time. They are saying it’s not a processor/software issue. Is this true? I’ve unplugged the new equipment and gone back to swiping, so I can keep the lower debit rates for processing.


                                                                                                                                                          Tom, this is the same issue I asked on August 27 or August 28. It seems like the path that the processing companies have taken is to protect signature transactions at the expense of pin transactions. And not only is there the rate differential when merchants process the card, the signature transaction is less secure than a pin transaction.
                                                                                                                                                          The rate differential sounds like its going to be an issue for the industry. Where do I join the class action lawsuit?


                                                                                                                                                            I have the same problem. I just had the vx520 reprogramed and cannot accept debit. I called Merchant services and they say that this is because of some new law. Of course I think there full of you know what. I kept being persistent saying that our customer has a right to use debit. After about a half an hour of arguing they admitted they don’t have any idea how to debit with the new program. Please update me if anybody finds out how to get this thing to take debit.


                                                                                                                                                              I upgraded to EMV last Sept. and I hate it as well. Like you, Cheryl, I’m having problems with chipped Debit cards. They will not allow for a Debit transaction for the life of me. If you dip the card, it’s run as a Credit signature. If you swipe it, sometimes it asks Credit or Debit or just prompt me to insert card. When I choose Debit, it tells me to insert the card, and it comes out as a Credit signature again. WTF is that!?

                                                                                                                                                              My processing company has no answers and simply tell me the credit card issuer may have programmed the chip to allow Credit only. If that’s the case, WTF is the point of offering Debit on the same card?

                                                                                                                                                              I was wondering, if I could set up both terminals. My old non EMV compliant terminal for Debit transactions and my new EMV compliant terminal for the rest. The problem with that is being held liable for a possible fraudulent Debit transaction on the non EMV compliant terminal. Arrrggggh!!! This stupid thing is costing me unnecessary money!

                                                                                                                                                                Cheryl M

                                                                                                                                                                Not sure if you can have 2 terminals running at the same time. Bottom line is that the issuing banks have not programmed the EMV Chip Debit cards to work with a PIN. The FBI has actually issued a fraud alert stating the CHIP/PIN transactions are more secure than CHIP/Signature transactions

                                                                                                                                                                Personally, I think the banks want to collect the higher (% per transaction) credit processing fees, versus the lower debit card flat rate fee. The FBI is telling cardholders that PIN transactions are safer and telling EMV Chip Debit Cardholders to ask for PIN implementation asap. We will see.


                                                                                                                                                                  Hi Cheryl, actually while most of what you say is good. If you have a processor charging you proper rates Debit cards processed as credit cards in most cases these days, is less cost than the old debit network flat rate fees. The only time that pin based debit network processed debit cards is cheaper is on a very low average ticket. Hope this was helpful. 🙂


                                                                                                                                                                    We use Cayan (formerly Merchant Warehouse) and the EMV reader (verifone VX520 with additional pin pad) is programmed in a way we don’t like. There are two issues:
                                                                                                                                                                    1. They say it automatically selects the lowest rate, debit vs. credit and that’s why our customer is not allowed to choose in many cases. Our shoppers are angry when they want to use credit and it forced them to use debit. They insist that other stores can “cancel” the debit and allow them to sign. They also refuse to use debit on principal, claiming that it’s less secure; that they don’t want anyone to “get their pin #”. While I know that this is not necessarily the case, they have heard this from conservative tv and radio personalities who use scare tactics on their shows and our shoppers are convinced it’s true. end result, they want to choose.
                                                                                                                                                                    2. We had a sale for approx $30, customer handed us card for bank debit and said “debit please” and it auto-ran as debit. As she left the store, she spotted a larger item and came back to the counter to purchase with the same card, debit again, this time almost $400. It ran automatically as credit this time. Seems like the emv cards are doing the opposite of what our company assured us. instead of running at the lowest/best rate, it is selecting the highest fees.

                                                                                                                                                                    I have called about this issue 4x and gotten the run around, on hold, transferred from the call center, to a tech support type person with and Indian accent, to a 2nd tier customer service person with an Irish accent. The last call I made they still refuse to give me any straight answer as to why these things are happening, so they transferred me to the cancellation department. The person there started me a new case # and is “looking into it” again.

                                                                                                                                                                    Does anyone know if the EMV pin pad can be programmed to allow out shopper to select Debit or Credit? We have a Verifone VX520

                                                                                                                                                                      Kellie Kat

                                                                                                                                                                      Would you please explain what locked and unlocked mean in reference to purchasing new EMV terminal? Thanks!

                                                                                                                                                                        Tom DeSimone

                                                                                                                                                                        Hi Kellie,

                                                                                                                                                                        Some machines are proprietary or locked in to one provider (sort of like how phones are), so it’s always important to ask your merchant services provider if a particular machine will work with their system. Many terminals can be reprogrammed to work with a variety of providers.

                                                                                                                                                                          Pam Coffman

                                                                                                                                                                          We have a construction business and our clients that want to pay by CC, fill out an authorization form and we process the charge online from that. We have never run a card. In the ten years that we’ve been accepting payments this way, we have never had a fraud issue. Probably because we’re actually meeting the cardholder and spending time in their home. Is there anything that I should be concerned about after Oct 1? I’m assuming I would be liable for any CC fraud processing my payments this way. Would that liability be eliminated if I were to start accepting the CC payments online through my website, either by setting up a shopping cart or using Intuit Payment Network?


                                                                                                                                                                            Hi Tom! A have question about my situation ,we open small flower shop lest year and we sign leas for 48 months for credit card processor no one think about changes,now they like me to by new C.C. Machine for $395 and paying still renting each month for a old one.What I need to do? Thank you.!!

                                                                                                                                                                              Tom DeSimone

                                                                                                                                                                              Hi Ana,

                                                                                                                                                                              That’s an unfortunate situation, and it makes me angry that the credit card processor is doing this. Unfortunately the 48-month leases are non-cancellable. I’ve never heard of anyone having luck getting out of the lease without paying the full amount. So there isn’t much to do about that.

                                                                                                                                                                              But the good news is that you can avoid this if you buy the new machine instead of leasing it. A new machine should only cost $200 – $350, which is much less that the 48-month lease works out to. Have you considered switching providers? I’d suggest that you take a look at Helcim.

                                                                                                                                                                              You might also consider not upgrading to the new EMV chip card machine. This comes with some risks, but it sometimes makes sense if you are at a low risk for fraud.

                                                                                                                                                                                Kellie Kat

                                                                                                                                                                                I am so glad I found this forum! I own a small business. My merchant service company wants to charge me $1632 for the new EMV device (via lease) OR $1200 outright! In addition, they are asking me to sign a non-cancellable lease! I am disgusted with how now merchant service companies are bullying small businesses. I have found the EMV for $150. If my current merchant service will not comply with ME, I am ready to bully back and find another provider. Thank you everyone for your input and valuable information.


                                                                                                                                                                                  Hey Tom

                                                                                                                                                                                  4 questions

                                                                                                                                                                                  1. I am a retail store so i only deal with walk in customers. I do not do any online orders. Bank of America is selling a emv terminal for $599 but I see some online that cost $150-200. Are these cheaper ones the same? Or are they inferior to the more costly ones, which will lead to my business being liable for a fraudulent card charge because I didnt have the best equipment possible, even though my terminal accepts emv cards?

                                                                                                                                                                                  2. I keep reading about businesses now being liable for any credit fraud for both debit and credit starting October 1st. In the past 13 years of my business I have not had any issues with fraud credit cards. So I may be a bit ignorant to ask, but how would it be fraud if debit cards use PIN numbers? And why would I be liable if the pin was right and the transaction went through?

                                                                                                                                                                                  3. Agian I have not had any experience to credit card fraud but is it safe to assume if I just check the customers ID and match the face and name to the credit card, that it isn’t a fraud card?

                                                                                                                                                                                  4. Are there any signs to tell if the card I’m about to swipe is a fraud card?

                                                                                                                                                                                  Thanks in advance.

                                                                                                                                                                                    Steven Spaner

                                                                                                                                                                                    Tom, thanks for the pre-EMV due date info. My wife and I run a BnB with two cabins. The weekday price is $175/nt with tax, and the weekend price is $207/nt with tax (we have a two night special which works out to be $375/2 nts). We aren’t filled all nights; over the past year the low was $450/mo to a high of $2700/mo. We almost always have the credit or debit card present; we take less than a half dozen gift card orders over the phone per year. We process all transactions over a phone line (POS), no internet transactions. So we are a low security risk as regards transmission of transactions.

                                                                                                                                                                                    We use the merchant services that works with Sam’s club which turns out to be FirstData and, while they have very nice and understandable statements and online access, I suspect that our rates are not as good as we could get. The FirstData FD132 machine with the EMV technology is about $200 more than the Verifone VX520 on Amazon.

                                                                                                                                                                                    My questions: 1) Is the Verifone VX520 going to work with FirstData or are we locked into the FD132? 2) Would I get a better deal with a different merchant services provider, maybe even a free EMV terminal? We are a very small business and very small volume business so we don’t want to be penalized because of that fact. From what I see on our FirstData statements we are not being penalized for our small volume, but we are paying a monthly service fee of $4.95 before all the transaction fees, and we have a one-time annual compliance fee of $49.95 (plus an annoying two months of $19.95/mo non-compliance penalty that they reverse when I see it and complain).

                                                                                                                                                                                    Thanks for your advice and evaluation in advance.

                                                                                                                                                                                      Tom DeSimone

                                                                                                                                                                                      Hi Steven,

                                                                                                                                                                                      The VX520 should work with Sam’s Club, but I always recommend calling to confirm this before purchase. You should also ask if they will charge a reprogramming fee, as this might sway your decision.

                                                                                                                                                                                      You can find free terminal deals, but be careful. Often these deals come alongside early termination fees are increased processing rates. No such thing as a free lunch, as they say. You may also end up paying for a warranty on the machine, which can add about $100 annually to the cost depending on the provider.

                                                                                                                                                                                      It might be a good time to switch, depending on how much you’ll have to pay for the machine and what percentage rates you’re seeing with Sam’s Club. Payline Data has a good low volume plan, and they sell EMV machines for about $250 I think. You may also be a good candidate for Payment Depot‘s pricing because of your highish average sale, although I’m not sure what they sell hardware for at the moment, under $400 I’m sure.

                                                                                                                                                                                      It’s always a tough call for lower volume businesses, since the amount you stand to save is not incredibly substantial in most cases. But definitely call up customer support to find out what the reprogramming fee will be and if they will reprogram the Verifone machine. If it’s going to cost well over $250 for the new machine, the savings you can find elsewhere could make switching worth your while. Never hurts to look around.


                                                                                                                                                                                        Hi Tom,
                                                                                                                                                                                        1) Is there any rate reduction anticipated with the transference of liability? Obviously, the processors save money on credit losses for fraudulent transactions as ‘I’ pick up the liability. If the losses were ‘insignificant’ there would not be the rush to change. So what should I get back for accepting (well be forced…) to pick up the liability?

                                                                                                                                                                                        2) I went in to a mall chain store, and used my Debit/EMV card for the transaction. They had the EMV reader, and said the transaction would be processed as a credit card not debit card. Is that true? If so, what happened to the rate differential for pin vs. signature transactions?

                                                                                                                                                                                          Tom DeSimone

                                                                                                                                                                                          Hi Brad,

                                                                                                                                                                                          There will be no change in the interchange rates for EMV transactions, at least not this year. Since EMV will be status quo, it’s more likely that we’ll see an increase in rates for swiped transactions than a decrease for chip transactions, but there’s been no indication that either will occur. The merchant only has an increased liability when a fraudulent chip card transaction is swiped instead of dipped, because theoretically it could have been prevented if the chip was read instead.

                                                                                                                                                                                          Whether a debit card will be processed on the debit or the credit networks depends on the programming of the machine and/or the choices of the business. To be processed on the debit networks, a PIN must be collected. But for smaller sales, processing on the credit card network will actually be cheaper because of the smaller per transaction fee, despite the larger percentage fee. To the best of my knowledge, the new EMV regulations will not change how this is dealt with. But I’ll definitely keep an eye on this issue.


                                                                                                                                                                                            Hello Tom, thank you for the above information. I spoke with my processor and was informed that to buy a new terminal is $950, but that will not help me if there any changes in the future on needing additional options to my terminal. To lease is $45/month for 48 months and then I own it & if there are changes needed to the terminal that is covered by them sending a new terminal or if something happens to my new terminal then it is replaced. What do you suggest is the best way to go? Should I look for another processor or try to find my own terminal, etc….? Thank you

                                                                                                                                                                                              Tom DeSimone

                                                                                                                                                                                              Hi Laurie,

                                                                                                                                                                                              Paying $950 for a machine is a bad deal, but the lease is even worse. Those leases are non-cancelable, meaning that if you want to switch providers or close your business before the lease is up, you’re stuck paying for the remainder of the contract. That’s $2160 total, for a $400 (max) machine. So if you have to choose between the two, choose the $950 option. It’s very unlikely that there will be any necessary upgrades any time soon. And even if you smash the first one with a hammer after a couple years, you’ll have saved enough to buy another one and still have money left over.

                                                                                                                                                                                              Helcim sells basic EMV machines for about $200. CDGcommerce rents them for a $100 annual fee. So if you switch, you’ll essentially get a $700+ signup bonus in the form of savings. Not to mention that you’ll probably get better rates.

                                                                                                                                                                                              You can look for a machine to buy on your own. It shouldn’t cost more than $350-400, even with NFC capabilities. But be sure that the machine will be compatible with your processor, and also be sure that they are even willing to reprogram the machine, and find out if they charge a reprogramming fee (some do, up to about $150).

                                                                                                                                                                                              I’d say it’s a good time to switch. Even if you have an early termination fee, it could be worth it. If not, the next best option is probably to buy your own machine. If not that, then I’d opt for the $950 purchase over the $2100 lease.

                                                                                                                                                                                              Good luck!



                                                                                                                                                                                                I work at a manufacturing company for signs, so we have sales all over the country to other companies big and small. 95% of the credit card payments we take are over the phone, and only the occasional local customers comes in to pay with their card. We currently use TSYS (which screws us) and we are looking for a new provider but keeping in mind the PCI 3.1 deadline in October. My question is, are we considered a MO/TO business or should we get an EMV capable card reader for those few walk in customers a year? If not, would going to a virtual online terminal be in our benefit?

                                                                                                                                                                                                Thanks in advance!

                                                                                                                                                                                                  Tom DeSimone

                                                                                                                                                                                                  Hi Lisa,

                                                                                                                                                                                                  You would be classified as a mostly MO/TO business. Unless the local orders are large, you will likely save money by not purchasing the terminal and instead using a virtual terminal. If you sign up on an interchange-plus plan, the difference in cost between a standard Visa swipe and the same card keyed in would be 0.30%. So if you key in $100K in sales through a virtual terminal that otherwise would have been swiped, then you end up paying about $300 more (roughly the cost of a new machine). So if you’re doing more than $3K per month in in-person sales, the machine will pay for itself in three years.

                                                                                                                                                                                                  Also consider that the difference between a standard in-person debit versus a keyed in debit (for debit cards issued by large banks) is about 0.80%, so the more debit you process the faster the machine will pay for itself.

                                                                                                                                                                                                  The other possible good thing about the terminal to consider is that the transactions will be more secure, and thus less prone to fraud. I doubt you get too many fraudulent transactions from in-person sales in your business, but it’s something to consider.

                                                                                                                                                                                                  So the bottom line is that as long as you buy a reasonably priced machine (about $300), it could pay for itself if you process a fair amount with it. But if you’re processing less than $2500 or so per month on the machine, it might not be the best option in terms of overall savings.

                                                                                                                                                                                                    Eric Hertha

                                                                                                                                                                                                    This whole changeover looks like it is getting worse by the minute. In my situation I have the following data path: Hotel Property Management System – to – Data Processor – to – Merchant Services for payment.

                                                                                                                                                                                                    So my hotel system interfaces with the data processor which encrypts etc and then sends the data to my Credit Card Payment Processor.

                                                                                                                                                                                                    In order for this to work , the Credit Card Payment Processor has to be certified to accept the data by the data processor.

                                                                                                                                                                                                    I know that two of the processors – Merchant Link & Elavon – are owed by banks . So take a big guess as to which banks they certify and which they do not.

                                                                                                                                                                                                    So right now only their owners are certified and no one else.

                                                                                                                                                                                                    The question then is how are you supposed to implement EMV if you Payment processor is not certified


                                                                                                                                                                                                      I have had a chip card for a while now and still use the magnetic swipe even on the ones that say I can insert it. Will the company or my bank make me use the insert choice?

                                                                                                                                                                                                        Tom DeSimone

                                                                                                                                                                                                        Hi Jeff,

                                                                                                                                                                                                        Yes. Come October, when you swipe a chip card instead of dipping it in a machine that is chip-capable you will get an error. But if the machine does not have a chip slot, you can swipe it instead.


                                                                                                                                                                                                          I do craft shows every once in a while. If I have a customer swipe, I don’t have the chip reader and the transaction is fraudulent, what exactly am I liable for? Do I just take the hit for my $25 item? Or will there be other crazy fees and fines attached to it?

                                                                                                                                                                                                            Tom DeSimone

                                                                                                                                                                                                            Hi Monica,

                                                                                                                                                                                                            You lose the money from the sale and may also be charged a chargeback fee, usually about $25.


                                                                                                                                                                                                              we are looking for merchant account, VT. to process our customers, but we are facing lots of prooblems, are we are setting up new business in Florida, we cannot provide our processing history, as we are starting.
                                                                                                                                                                                                              please help us in getting one.
                                                                                                                                                                                                              and what if we go for EMV? can we do charge our customers, if we are doing business in MOTTO?

                                                                                                                                                                                                                Tom DeSimone

                                                                                                                                                                                                                Hi John,

                                                                                                                                                                                                                If you are only MO/TO, EMV will not apply to you at all. So you don’t have to worry about it! All of our featured providers can set up accounts with no processing history, but since it looks like your business might fall into the higher risk category, I’d suggest giving Payline Data a look first and foremost.

                                                                                                                                                                                                                Good luck!


                                                                                                                                                                                                                  We currently have two standalone credit card terminals (Verifone VX510) and also a keyboard/credit card terminal that runs through a POS. We are planning to upgrade the standalone units to Verifone VX520, but do we also need to upgrade the keyboard/credit card terminal as well? If so, who makes a keyboard/credit card terminal that is EMV capable?

                                                                                                                                                                                                                    Tom DeSimone

                                                                                                                                                                                                                    Hi David,

                                                                                                                                                                                                                    By keyboard terminal, do you mean a USB plug terminal? If so, there are currently not a lot of good options compatible with most processors. Hopefully we’ll see more USB chip card hardware released in the next month or two. If not, let me know exactly what kind of terminal you are referring to.

                                                                                                                                                                                                                      Derek Boczenowski

                                                                                                                                                                                                                      Great article Tom!

                                                                                                                                                                                                                      I have a quick question about what is considered an EMV transaction. In the case of a kiosk where currently you manually input information to pay for a conference fee (name, address, exp date, etc.) and there is a card reader that ONLY reads a card number that floods into the form being submitted, would this be subject to the liability shift? I wonder because the form is sent to a server that THEN verifies the information with the processor. It is just a reader, not a true POS device.

                                                                                                                                                                                                                      And even if it is, because there is no PIN being entered, can the reader be updated to just a chip reader, and not a chip and PIN reader, which is much more expensive?

                                                                                                                                                                                                                        Tom DeSimone

                                                                                                                                                                                                                        Hi Derek,

                                                                                                                                                                                                                        That’s a great question. The transaction you describe should not be impacted by the EMV liability shift. When the reader is only used to input the card details into a virtual terminal, the transaction is technically “card-not-present” even though in reality the card is present. Card-not-present transactions will not change with chip cards, so I see no reason why (unless a new regulation is put into place) this would be a problem in terms of liability.

                                                                                                                                                                                                                        Some virtual terminal do actually have card readers that allow the user to process the transactions as card-present, and those might need to upgrade hardware to a USB chip card reader. But there will be no need for a chip and PIN reader. The chip cards issued in the US will operate without a PIN, although this could change in the future.

                                                                                                                                                                                                                          Mark Morris

                                                                                                                                                                                                                          Hi Tom,

                                                                                                                                                                                                                          I wrote integrated credit card processing for point of sale customers. We swiped the card, submitted the card data (card#, exp Date, Name) with the transaction data (amount) then submitted it to a third party software (PC Charge) that integrated with many processors.

                                                                                                                                                                                                                          Are there chip readers that would work like the old card swipers on your computer? And are there any third party software providers for online authorizations that have gotten certified?

                                                                                                                                                                                                                          Thanks for any help. Mark


                                                                                                                                                                                                                            If I have multiple terminals, should I transition everyone to EMV or just one?

                                                                                                                                                                                                                              Tom DeSimone

                                                                                                                                                                                                                              Hi Paul,

                                                                                                                                                                                                                              All terminals should be changed to provide the best security. By the end of this year the vast majority of cards you’ll be seeing will be chip cards, so it would be inconvenient to have to send all the cards to one particular terminal.

                                                                                                                                                                                                                                oscar munoz

                                                                                                                                                                                                                                Will I have to purchase an EMV from my existing provider? Will I have to renew my contract when I get a new EMV terminal?


                                                                                                                                                                                                                                  My retail business is closing the first of 2016. MY contract will be fulfilled in February. I have been told by my processor it is not necessary to buy their EMV $695 terminal, as long as I am compliant, I am safe. I can continue to use my old terminal, no problem. Are they within their right to charge more per transactions because I don’t upgrade?

                                                                                                                                                                                                                                    Tom DeSimone

                                                                                                                                                                                                                                    Hi Jerry,

                                                                                                                                                                                                                                    Interchange rates (the wholesale cost) will not be impacted by the EMV switch, so I would say that there is little reason for a rate increase, aside from perceived risk.

                                                                                                                                                                                                                                    But it seems they do have the right to assess such a surcharge, and I’ve wondered if processors would do this (although have not heard confirmed reports of this, it’s too soon to say because the switch hasn’t happened yet). Has your processor told you they would charge a fee for not upgrading?



                                                                                                                                                                                                                                      Now that I’ve read your article I finally understand what all the fuss is about. However, what about businesses that primarily do transactions over the phone? A lot of my office’s clients are unable to come into the office to make payments. Therefore a lot of our transactions are manual input. I don’t see the benefit to the EMV terminal if the card isn’t present. Would switching be pointless?

                                                                                                                                                                                                                                      Thank you.

                                                                                                                                                                                                                                        Tom DeSimone

                                                                                                                                                                                                                                        Hi Christopher,

                                                                                                                                                                                                                                        The new EMV standards will not impact manually inputed transactions at all. But you may still bear the burden if you swipe a fraudulent transaction. If you have absolutely no in-person sales, then there is no need for a chip card reader (or any reader for that matter). The fewer in-person transactions that you have, the lower the risk of receiving a fraudulent transaction.


                                                                                                                                                                                                                                          To be fair, Card Not Present (CNP) is the favorite and most frequent fraud type performed by fraudsters. There are usually less security measures in place in order to accept the card information for payment of goods/services. Take a look at the Card Acceptance Regulations that govern both the Visa and MasterCard associations for the proper way to accept these types of transactions in order to minimize your liability of potential fraud.

                                                                                                                                                                                                                                            Tom DeSimone

                                                                                                                                                                                                                                            Hi Joe,

                                                                                                                                                                                                                                            That’s absolutely true, and card-not-present transactions will always cost more for that reason. But the new EMV regulations and standards in the US will not directly impact card-not-present transactions or security.

                                                                                                                                                                                                                                              Ben Pearce

                                                                                                                                                                                                                                              And therein lies the irony. EMV does *nothing* to mitigate CNP fraud.

                                                                                                                                                                                                                                              And Signature-Preferring EMV (which has been implemented by about half the issuers as opposed to a PIN-preferring EMV card) does *nothing* to prevent stolen physical cards from being used.

                                                                                                                                                                                                                                                Tom DeSimone

                                                                                                                                                                                                                                                Hi Ben,

                                                                                                                                                                                                                                                I absolutely agree. The EMV switch isn’t a panacea by any means. It will prevent counterfeit-based fraud, but that’s about it for now. I would guess that within the next few years we’ll see more and more chip and PIN cards issued. Based on what I’ve heard, that’s the goal the credit card networks are working toward in the US for the near future (maybe 5 years).

                                                                                                                                                                                                                                                  Jim Towey

                                                                                                                                                                                                                                                  You say the merchant should NOT pay $600+ for a new EMV terminal. Should it be less than that, and if so, how much? Or should the merchant services processor cover the cost of the equipment? Or what is a reasonable monthly fee for the EMV terminal?


                                                                                                                                                                                                                                                    Tom DeSimone

                                                                                                                                                                                                                                                    Hi Jim,

                                                                                                                                                                                                                                                    A chip card reader with NFC built in might cost between $300 and $400. A chip card reader with no NFC should be closer to $200 to $300. The only chip card readers that might approach $600 are wireless terminals, which 99% of businesses won’t need – especially with phone-based card readers so prevalent.

                                                                                                                                                                                                                                                    I generally do not recommend renting terminals, and leasing is out of the question. But if you were to rent a machine, I would say under $10 per month might be appropriate. CDGcommerce rents machines for $80 per year (which includes insurance). Helcim sells chip card machines for $199.

                                                                                                                                                                                                                                                    Hope this helps.


                                                                                                                                                                                                                                                      I was told by a credit card processing company that the merchant will still be charged a 25 processing fee, even though a chip enabled processor is used if charge is questione.
                                                                                                                                                                                                                                                      I thought the chip terminal is suppose to protect the merchant from fraud but why should the merchant be charged the 25 dollars is charge is questioned by the user?

                                                                                                                                                                                                                                                        Tom DeSimone

                                                                                                                                                                                                                                                        Hi Diane,

                                                                                                                                                                                                                                                        The $25 charge they are referring to is likely a chargeback fee. Chargebacks can occur on any transaction for a number of reason. Counterfeit fraud is one reason (which chip cards help to prevent), but other reasons include services not delivered or faulty goods – which chip cards will not impact.

                                                                                                                                                                                                                                                        By decreasing the incidence of fraud, chip card acceptance will help to prevent some chargebacks. But not all.

                                                                                                                                                                                                                                                          Andrew Krompier

                                                                                                                                                                                                                                                          Hi Tom, could you clarify my issue with. ” fraudulent” cards. None if my patients will be giving a. “fraudulent ” card for a copayment. BofA wants. $630 for a new EMV terminal. Is the card itself that creates potential for fraud or the processing of the payment through a non Emv terminal? Thanks

                                                                                                                                                                                                                                                            Tom DeSimone

                                                                                                                                                                                                                                                            Hi Andrew,

                                                                                                                                                                                                                                                            The trouble is that the credit card processor wants to minimize the risk of fraud, and chip transactions are much less likely to be fraudulent. So although in reality your customers are VERY unlikely to commit fraud because of the nature of your business, the processor is not so sure. If a customer pays with a chip card but is forced to use its magnetic stripe instead because you do not have a chip card reader, then you would ultimately be responsible if it ended up being a fraudulent transaction.

                                                                                                                                                                                                                                                            In the future it’s likely that processors will become more aggressive in terms of getting you to switch, but at the moment it is voluntary. But again, you should NOT pay $600+ for it, and I would strongly suggest looking for a different processor.

                                                                                                                                                                                                                                                            Good luck!

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