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Educating Your Customers on How to Pay with Chip and PIN Credit Cards

Traditional swipe & sign credit cards are quickly being phased out in the United States. In their place are Chip & PIN credit cards — a new payment technology that offers greater security and fraud protection.

This transition isn’t only happening in the United States. Chip & PIN credit cards have already become the standard in most parts of the world, with the U.S. being the last major market to reach full compliance.

There are many reasons behind America’s relatively late arrival to the Chip & PIN game. Probably the biggest hurdle is cost. In order to begin accepting these newer credit cards, merchants must upgrade their hardware — a process that could cost as much as $2.6 billion by 2018.

But in many ways, failure to update legacy credit card terminals could carry even higher costs. The United States is home to 25 percent of all credit and debit cards but nearly 50 percent of global credit card fraud. And with updated compliance rules, covering these losses could increasingly become the responsibility of merchants who haven’t upgraded their credit card readers yet.

Are Your Customers Ready for Chip & PIN Credit Cards?

Making the transition to Chip & PIN technology benefits you, the merchant. But given the extra security features, consumers also come out ahead. Unfortunately, however, most American shoppers haven’t ever heard of Chip & PIN plastic.

Credit card issuers are partially to blame. Very few companies have sent out Chip & PIN cards to their customers (Chase was only the first major American bank to do so). Consequently, very few American shoppers even have the technology in their wallets. And those that do aren’t always aware of how to use these newer credit cards:

  • The consumer (not the merchant) physically inserts the credit card into the terminal.
  • Thereafter the consumer (and not the merchant) manually enters in a personal identification number (PIN) to complete the transaction.

So how do you educate your customers (after updating the credit card terminals in your store)?

In theory, you would think that the credit card issuers would be more than willing to prepare American shoppers. Credit card companies should be rushing to promote the extra security features that come with Chip & PIN technology.

Perhaps they already are — and card users simply don’t take the time to read promotional materials that come in the mail.

Although the onus should be on credit card issuers, the responsibility ultimately falls on your shoulders. And maybe this makes sense given that retail stores are usually where shoppers first encounter terminals capable of reading chip-enabled credit cards.

The most effective way to educate customers begins and ends with training your store staff. Make sure that all of your cashiers understand how Chip & PIN technology works. Only then can your employees walk shoppers through the actual process.

You’ll need to conduct training sessions with your staff — complete with dry runs for chargebacks and returns. It might also help to prepare your cashiers for potential resistance. After all, Chip & PIN is a radical departure from the traditional swipe & sign purchases.

For tips on how to get started, use the links below:

Topics: Payment Technology, PCI Compliance and Fraud Prevention

Welcome to the BluePay Blog!

Whether you're a small business, an enterprise corporation, a financial institution, or a software partner, we have created a series of blog posts to help you and your customers, learn more about the complex nature of payments. Take a look to learn how payments can help to simplify your business operation, and may even help to grow your revenue.

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