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Mobile point-of-sale service developer CardFlight Inc. will make an EMV chip card-compatible mobile POS reader available in the second quarter, in anticipation of the Oct. 1 liability shift.
That’s the date card fraud at the point of sale is scheduled to shift to the party least prepared for it. The payments industry is in the midst of aggressive efforts to upgrade merchant POS terminals to ones that can accept EMV chip credit and debit cards.
New York City-based CardFlight says development of the EMV-ready service, including the processor integration, gateway, software, and Web interfaces, was managed by its in-house staff. The reader is undergoing certification with multiple processors, with the expectation that it will be completed in the second quarter.
The reader, which also accepts magnetic-stripe transactions and connects to iOS and Android devices via the device’s audio jack, works in conjunction with SwipeSimple, CardFlight’s mobile POS app, says Derek Webster, founder and chief executive.
“Merchants continue to use the SwipeSimple applications for iOS and Android, and our software automatically detects whether the merchant has plugged in a basic magnetic-stripe reader or our new EMV-ready readers to function seamlessly based on the card reader the merchant has,” Webster tells Digital Transactions News in an email.
The readers work with chip-and-signature EMV transactions, Webster says. “Our research leads us to expect the vast majority of U.S. issuers are setting up their EMV cards as chip-and-signature only (no PIN),” Webster says. “We evaluated multiple options including chip-and-PIN, and felt that audio-jack chip-and-signature readers are the best options for mobile merchants, balancing ease of use, low cost, and a small/lightweight form factor.”
Issuers opting for chip-and-signature authentication do so partly because it will seem most familiar to consumers who are accustomed to signing for credit card transactions. They also argue signature authentication lets them get EMV cards out faster than PIN verification would. Many merchants, however, prefer chip-and-PIN because they say it affords better protection against fraud.
The audio jack connection is faster than a wireless connection using Bluetooth, Webster says, and creates fewer support issues.
Resellers, such as independent sales organizations and acquirers, can bundle or price SwipeSimple however they wish, Webster says. They pay a wholesale rate for the readers and the monthly per-merchant fee for the software and gateway. “Reseller pricing depends on the number of units/merchants a reseller is deploying to, so we don’t have any standard pricing we publish,” he says.
Mobile EMV readers will be an important part of an ISO’s or acquirer’s sale package this fall, says Adil Moussa, principal at payments-advisory firm Adil Consulting. The primary focus for most, however, will be updating traditional POS terminals.
“Acquirers will focus first on getting everybody on EMV-ready POS terminals,” Moussa tells Digital Transactions News in an email. “Because these kinds of efforts usually take a long time and the compliance rate from merchants is usually average, ISOs and acquirers will be busy sustaining their efforts to convert the largest portion of their portfolio first, and those merchants don’t require mPOS.”
Rather, EMV-ready mPOS is a second-order priority unless an ISO or acquirer has a large number of merchants using them, Moussa says.
In addition to the mPOS app and reader, SwipeSimple includes transaction-reporting services and an administrative Web site for merchants. Resellers have online access to merchant enrollment and portfolio management.
SwipeSimple is co-branded on the reader and in the software with the reseller’s logo and other information, Webster says. Initially, the EMV mPOS reader will be available from POS Portal, a Sacramento, Calif.-based POS-equipment distributor.
Competitors also are at work on EMV-ready mPOS readers. Square Inc. expects to ship its device for $29 yet this year.
