Chip and Pin solutions for SMES

Chip and pin technology has been widely used in the UK since 2004 and for small- and medium-sized businesses (SMEs) Chip and PIN solutions may be the most economical payment system.

Chip and PIN solutions comprise an electronic cash till linked to a card reader with a keypad, plus an integrated thermal printer. The customer uses a secure four-digit number to authorise the sale, which is entered manually on the keypad. Chip and PIN solutions are one of the most secure methods of accepting payments and making payments – and most card readers these days have concealed keypads, or card readers which the user can pick up and shield while entering their pin number.

Chip and PIN Solutions – The Pros

Chip and PIN is the term given in the UK and Ireland to the EMV Smartcard (Eurocard, MasterCard and Visa Smartcard) system of accepting and making payments or drawing cash from ATM cash machines.
Chip and PIN solutions replaced the swipe card system in which a card was passed through a card reader which read the magnetic strip and then a slip was printed out for the customer to sign. The signature had to be verified by the cashier at POS and the customer retained part of the transaction slip.
Using a microchip with customer details imbedded in the card and a PIN number has speeded up the process of payment at POS – as well as safeguarding transactions and making fraudulent transactions at POS more difficult.
For SMEs, there are a number of benefits to using Chip and PIN solutions, including the security factors:

  • Security against card fraud – FSA (Financial Services Authority) regulation in November 2009 placed the onus on banks to reimburse cardholders for fraudulent use of Chip and PIN, unless banks can prove the cardholder authorised the fraudulent payment or did not safeguard their PIN number
  • Cheaper Merchant Fees – Merchant service providers such as MasterCard are beginning to reduce merchant fees applicable to card transactions, making these more economical for SMEs
  • Cheaper Service Plan Fees – Fees for service plan on credit cards are now below 1% and belonging to a trade association can attract discounts on service plans. The cost per card transaction has also fallen to as little as 8p – card transaction used to cost as much as £20
  • Accepting online transactions can boost business – gateway systems are an online version of Chip and PIN technology and gateway fees for online transactions can also be capped. Merchant services providing gateway payment processing can usually accommodate different shopping carts and gateway payment systems can be set up remotely by the merchant services provider
  • Faster Payment Transactions – Chip and PIN solutions using IP or GPRS technology can speed up payments
  • Integration of business systems – EPoS Chip and PIN solutions can be linked to security, HR, CRM and stock control software for fast payment transactions and automatic data logging
  • Disabled customers are often issued with Chip and Signature cards if unable to use a keypad, meaning all customers will be able to use Chip and PIN solutions at your business premises.

Why SMEs should update payment systems

How businesses accept payments can say much about the perceived professionalism of the company. Some factors to bear in mind when deciding on whether to opt for Chip and PIN solutions are:

 

  • Even small retailers, sole traders and SOHO (small office/home office) workers may need a payment terminal and mobile GPRS or Bluetooth Chip and PIN solutions can travel with you, as well as sit on a countertop or be used as a portable terminal on your business premises (eg in a restaurant)
  • The cost of installing new technology is often a factor which holds SMEs back from updating systems – however, businesses which accept card payments have been shown to increase footfall and takings
  • Some SMEs pay for the cost of installing payments terminals by increasing the price of products slightly. This is often counterbalanced by the fact that Chip and PIN card transactions are actually accepted, meaning happy customers and happy SME business owners.
  • Installing modern payment terminals using Chip and PIN solutions need not mean a huge outlay – existing business Broadband is used to connect payment terminals, saving on phone lines; and Broadband connectivity also means multiple terminals can be used according to business needs eg seasonal fluctuations in trade and personnel
  • With electronic payment transactions automatically logged on your payment system, the need for paperwork and accountancy staff to deal with this are both reduced.

If you would like more details about how Chip and PIN solutions can improve business efficiency and save SMEs money, complete the online enquiry form on our website for free quotes without obligation from agreed suppliers who specialise in SME business solutions.

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