Published on the 09/07/2014 | Written by Newsdesk
The clock is ticking for Australian enterprises which still allow customers to sign for credit card purchases; from August they will need technology to support chip and PIN purchases…
Australian businesses have until the end of the month to replace magnetic strip card reading devices that churn out receipts requiring a signature to complete a transaction with systems able to read computer chips and accept PINs as signature verified transactions are phased out.
According to the Australian Payments Clearing Association 13 million transactions are made each day at Australian ATMs and in-store terminals; around 50 million credit and debit cards have been issued. The main card issuers have pushed for the move to chip and PIN payments in order to further reduce the rates of financial crime.
Australia’s bars, pubs and clubs could face a particular problem unless they update their card reading devices and educate staff in the next couple of weeks. While it is common practice to leave a credit card behind the bar to start a bar tab, and then sign for drinks at the end of the night, that won’t be possible after 1st August when consumers will have to input a PIN to complete the purchase.
To complete a transaction wait-staff will have to either take a mobile card reader to the customer to allow them to input their PIN, or rely on customers to go up to the bar at the end of the night to input a PIN and reclaim their card.
There are a series of start-up businesses offering workarounds; Clipp for example is offering an app for Apple and Android devices that allows people to pay for their tab using a smartphone. In addition most of the banks now offer smartphone payment apps which mean that credit or debit card details are stored on the secure element of the phone.
Australia’s small businesses are most likely to be caught out by the signature cut-off despite it being well telegraphed by the major card issuers and banks. A recent survey conducted on behalf of PayPal suggested that as many as 54 percent of Australian small and medium enterprises were yet to update their card reading and point of sale technologies.
PayPal itself has launched PayPal Here a smartphone app which combined with a bluetooth chip and PIN card reader allows vendors to continue to accept credit card payments next month. Accounting software company MYOB meanwhile, has announced an updated smartphone plug-in for its PayDirect system, which turns a smartphone into a card reader, so that it too can accept chip and PIN payments.
