Banker reveals ‘chip’ credit card secrets

Find out what folks at the Parkrose Business Association learned about accepting, and using, the new ‘chipped’ credit cards …

PBA Treasurer William Keller CPA, and PBA President Angie Jenkins of Hookset Automotive, sign in the guests for the February meeting.

Story and photos by David F. Ashton

When members and guests of the Parkrose Business Association (PBA) gathered for their monthly noontime meeting on February 18, they got a quick course on the ramifications of new chip-embedded credit card technology you are just now getting acquainted with.

Parkrose Neighborhood Association Chair Annette Stanhope shows us her buffet luncheon plate, catered by Holliday Inn Airport.

PBA Venture Portland District Organizer Adrienne Sweetwater and PBA President Angie Jenkins begin the meeting.

As the meeting got underway, members introduced themselves, new members were welcomed and announcements were made.

Their featured speaker, Brandon Sanders, is Payment Solutions Consultant with US Bank. Elavon brought attendees up to date about the new credit cards.

US Bank Payment Solutions Consultant Brandon Sanders says that, while credit cards have been around for longer than a century, technological changes are afoot.

Embossed cards date back to the early 1900s, when oil companies and department stories issued their own credit cards. In 1966, Barclaycard in the United Kingdom launched the first general credit card.

“The ‘magnetic stripe’ – containing data on the back of the card – has been around for over 50 years, but it really didn’t take off until the early 1980s,” Sanders said.

Today, the new technology is the “chip card”. It has been used by the rest of developed world for over a decade now, but the US officially started the transition only last October, Sanders said. “It was, in many ways, forced upon us by Visa and Mastercard.

“The reason being last year’s $11 billion in card-presented fraud worldwide – but the US was responsible for roughly $8 billion of that fraud,” Sanders said. “The chip card has proven to be vastly superior in the way of security.”

Changing to the chip-embedded card portends changes for some businesses, credit card expert Brandon Sanders says.

“While online businesses will see no change in their process, retail shops and restaurants will see some significant changes. You may have already received your new chip card in the mail and have seen that the card is no longer swiped and rather it is inserted or punched into the terminal.

“One of the main changes that you may not have yet seen are is requirement for a 4-digit Personal Identification Number (PIN) on both debit and credit card transactions,” Sanders said. Unlike before where only debit cards had a pin and you were able to choose when it was used, it will soon be required on all transactions.”

Transacting payment at the table
Another change for restaurants and bars, added Sanders, is a change to the tipping process, where the terminal will prompt for the tip to be entered at the time of sale. “With these new systems and devices – either on the table or brought to the customer at the table – the credit card never leaves the customer’s possession.”

The chip card is more secure, Sanders observed, because it encodes the card data, making it hard to duplicate – and that makes it far more expensive even to try to duplicate. Also, the requirement of a 4 digit PIN for the tip to be entered immediately greatly reduces the possibility of fraud.

“For example, the Target data breach that amounted to $42 million in fraud would have been cut to under $2 million if we had already moved to chip and PIN transactions,” explained Sanders.

-6 According to “payment solutions” specialist Brandon Sanders, “near-field” smart phone payments are secure.

Considers “near-field” smart phone payments secure
Near-field” smart phone payment processing has been in use for quite some time, Sanders said. “In spite of myths and misinformation, this is the most secure transaction possible.

“The problem is that most customers do not know where they can use their Apple Pay or Android Pay,” Sanders later told East Portland News. “Most new ‘chip card ready’ terminals can also perform near-field transactions.”

Major differences in “payment solutions” systems and providers
The major mistake made by businesses with their credit card systems is that they are being sold a system that works now, but may not be adequate for the very near future.

“For example, you can purchase a terminal for $199 through us, but in many cases, this terminal is not a good fit. While it can handle the chip card transactions, it cannot take smart phone payments and it has an internal PIN pad,” Sanders noted. “Thus you will have to flip the terminal around to the customer for them to enter a pin.”

At the same time, if a business is paying more than $1,000 for a new, state-of-the-art top-of-the line terminal that includes Bluetooth technology, they are probably paying too much, Sanders advised.

His advice was well received by the business people present at the meeting. For more information, contact Sanders at brandon.sanders@usbank.com.

You’ll feel welcome, when you meet with the members of the PBA.

Meet the PBA members on March 17
The Parkrose Business Association, one of our favorite business groups, gets together again on March 17 at 11:30 a.m.

You’ll find them in outer East Portland, at the Holiday Inn Airport Hotel, located at 8439 NE Columbia Boulevard (in the hotel building, around the back at the former Flirt’s entrance – not the Convention Center next door). The meeting is free, and the optional buffet lunch is $18, including dessert and gratuity; reservations are NOT required.

© 2016 David F. Ashton ~ East Portland News

Be Sociable, Share!

    Comments are closed.

    © 2005 - 2017 David F. Ashton East PDX News. All Rights Reserved.