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John Giles, President of Future POS, Discusses EMV 2 of 2

Today’s post is the second in a two part series discussing EMV technology and the hospitality industry. John Giles, President of Future POS, Inc. answers your pressing questions on changing compliance standards and the implementation of EMV in the United States.

Bank cards with EMV chips

EMV Standalone Terminal “Scam”

Speaking of stand beside terminals, I have to address something that I’ve seen on the street in various markets that I find very unscrupulous, if not criminal.  In one New England town, a credit card company with questionable ethics went door to door and told merchants that if they didn’t throw out their integrated solutions and use his EMV terminal that impending doom would follow.  Literally most of these merchants were scared into a solution that was a step backwards operationally.  When you use a standalone EMV device and just press a button on the POS labeled “Visa”, there are no checks and balances that it actually was a Visa because the systems aren’t connected.  So when you accidentally hit MasterCard instead of Visa, your POS and your EMV terminal no longer balance and you get to figure out manually where you screwed up (wasting countless hours).  What’s even worse about the New England situation was that the terminals he sold couldn’t even do EMV!  They just had the EMV slot which made them look ready for EMV, but when all those merchants went to enable EMV they either had to buy new terminals or ship them back to have them configured.

EMV Certification Backlog

Software companies are left to do the painful, costly, and time consuming certifications that are required to create an integrated EMV solution.  If you want to use EMV Device A with Processor X, that’s a certification for all 4 major card brands.  If I then want to interface Device A to Processor Y, or Device B to Processor X, guess what?  Back of the line.  Oh, and did I mention that the wait is about 6 months for each certification?  As you can guess, this backlog is a problem where only the big guys will be able to get any kind of direct EMV solutions in a timely manner, so there will be lots of market consolidation as the little guys get hung out to dry waiting for an EMV solution that may be years away.

EMV Will Eliminate Many Small Payment Companies

As I just mentioned, the EMV certification process is going to be long and expensive, and repetitive for each device/processor that we want to work with.  That means that those resources have to be used wisely to create EMV solutions for companies that have the best chance to sell lots of it.  As a business owner, you have to hitch your cart to the horse that you think has the best chance of winning.  Lesser horses aren’t going to see much of our cart.  It’s just common sense.

I hope you’ve been informed or at least entertained by my EMV state of the union.  I’ve been in this business for about a quarter century, and I can honestly say this is the biggest “shakeup” in payment processing that I’ve ever witnessed.  At Future POS, we have the most talented development staff in the business and no matter what comes our way, we’ll figure out the best way to make it work.  We’ve also been in business for over 18 years, and have a large wealth of knowledge as well as financial stability to ride out these “unforeseen detours”.  But I don’t have to tell you the value of partnering with a stable company that will be there to take care of you years and decades from now.