Thursday, September 11, 2014

Credit Card Payment Tech - Change is coming in 2015

Three new ways of paying by credit card are coming (well, two for our international court friends).  So courts should begin planning for this conversion in 2015.


There are two parts to this story: Near Field Communications (NFC) technology such as the recently announced Apple Pay and the conversion to Chip and PIN cards.

NFC and Apple Pay

The big technology news this week were Apple’s new phone and watch announcements.  But many may have missed their introduction of Apple Pay that allows users of newer iPhones (5s and new 6 models).

Wired Magazine succinctly explains how this works (also see the accompanying photo):
“Instead of a card, Apple Pay uses the iPhone 6, the larger iPhone 6 Plus and the Apple Watch announced today. Want to make a payment? Tap your phone at a retailer’s payment terminal. The phone uses a combination of NFC, Touch ID, and a secure chip called the Secure Element to complete the payment. To add a card, simply snap a pic of it using the iPhone’s camera. After verifying with your bank, the card is added to Passbook. Apple doesn’t store the number, or transfer it to the merchant during a transaction. Instead, it has a device number that’s relayed during payments along with a dynamic security code. If you lose your iPhone, you can use Find My iPhone to suspend payments for that device without having to cancel your credit card.”
And as ComputerWorld points out, “(t)he timing is also good given that retailers have to install new point-sale-systems for chip and PIN technology by October 2015.”  More on this below.

Last on this part of the subject for our programmers out there, the Stripe development environment has announced support for developing Apple Pay enable apps.  For more go to:

Competing NFC Standard

Of course nothing is simple in the “standards” world.  According to a Wall Street Journal article a competing standard has been in development:
“Best Buy and Wal-Mart are instead backing a retailer-owned mobile technology group called Merchant Customer Exchange, which also counts Target Corp. among its members. 
MCX's payment service requires only a software download and can be used on existing iPhones and Android devices, whereas Apple's is only for the latest generation handset. 
The group announced the launch of a mobile wallet application called CurrentC, which it said will run as a pilot in certain cities before being rolled out nationally in 2015.”
You can check out the CurretC website for more information.

Chip and PIN Cards (EMV standard)

EMV stands for Europay, MasterCard and Visa, and according to Wikipedia is a “global standard for “inter-operation of integrated circuit cards (IC cards or "chip cards") and IC card capable point of sale (POS) terminals and automated teller machines (ATMs), for authenticating credit and debit card transactions.  See the photo from Wikipedia below* for an example of a credit card with this technology.

 The reason they were dubbed Chip and PIN cards in the UK and Ireland was to explain to the consumer the need to enter a private PIN number (like a debit card at a bank ATM) on the merchant’s card transaction machine after inserting their card to complete the transaction.
As this Fox Business website article explains:
"These new and improved cards are being deployed to improve payment security, making it more difficult for fraudsters to successfully counterfeit cards," says Julie Conroy, research director for retail banking at Aite Group ( , a financial industry research company.  "It's an important step forward." 
For merchants and financial institutions, the switch to EMV means adding new in-store technology and internal processing systems, and complying with new liability rules. For consumers, it means activating new cards and learning new payment processes.”
And as most of you already know, the reasons and urgency for this conversion was revealed by the Target store payment security breach in late 2013.  Target's actions to correct this are explained in this USA Today article:
“Target is already in the process of replacing its store registers to accept chip-and-pin cards as the company brings a renewed commitment to information security after suffering one of the largest data breaches in retail last year. Since the breach, Target sped up its adoption of the technology and committed $100 million to the effort.”
Additional articles on the EMV conversion are listed below:

Bottom line, if you have credit card processing in your courts you will need to convert to Chip and PIN and might as well consider the NFC technology as well when upgrading.

*"American Express EMV card" by American Express - Original publication: American Express forums, Immediate source: American Express forums. Licensed under Fair use of copyrighted material in the context of EMV via Wikipedia -

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