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Chip Card Processing Best Practices

In most POS situations, the cardholder, not the business owner, inserts the card into the terminal.

Use the following best practices when accepting a chip card:

  • Ask your customer to insert their card into a chip ready device and leave it in the device during the entire transaction.

  • The chip card and terminal will determine if a PIN or signature is required for verification.

  • If a PIN is required, the device prompts the customer to enter it. (When a PIN-based transaction is approved, the customer retrieves the chip card from the terminal. There is no opportunity for the business owner to examine the card.)

  • If the transaction is PIN-verified, there is no need for a signature.

  • If the customer does not know their PIN, ask for another form of payment.

  • Print a copy of the transaction receipt for the customer.

  • If the transaction is not PIN-based, the receipt will have a signature line for the customer to sign.

  • Ask the customer for their card to compare signatures from the receipt and the back of the chip card. Do not accept an unsigned card.

If the POS terminal (or credit card terminal) cannot read the chip on the card, follow “fallback” acceptance procedures and swipe the card’s magnetic stripe or key enter the data.

Warning: swiping or key-entering a transaction increases the risk of accepting a counterfeit card because the chip information is not available. And, with the October 1, 2015 liability shift, liability for chip card-present fraud shifts to whoever is not using chip technology.

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