Credit Card Updates and EMV

I’m sure the calls have started coming for many of you…salespeople claiming that your credit cards will stop processing soon or that you’ll be facing liability on all transactions if you don’t switch to their company’s card processing. Unfortunately, the upcoming changes to credit card regulations have left the door open to people trying to exploit the uncertainty to make money. Hopefully this post will both set your mind at ease and give you a look at some of the new features that we’ve made available in our OpenEdge/Accelerated Payments (X-Charge) integration to get businesses ready for EMV and streamline your credit card processing.

To start, as OpenEdge explains in their EMV FAQ, ” EMV is a chip technology used globally in place of magnetic stripe. EMV chip technology helps to reduce card fraud in a face-to-face card-present environment, provides global interoperability and enables safer and smarter transactions across contact and contactless channels.” Basically, EMV allows more secure credit card transactions that require a card present that’s nearly impossible to fake and therefore greatly reduces fraud.

To process EMV transactions you need to have a new EMV-capable credit card swiper. As OpenEdge mentions in the FAQ the liability shift for merchants begins in October 2015. However, this simply means that if a customer presents a credit card that has an EMV chip in it and you choose to swipe it instead of using the new EMV method of processing that any chargebacks would automatically be the business’s responsibility instead of the credit card processor. That said, it’s exceedingly difficult for a salon or spa to win a chargeback on a regular credit card transaction so the added costs of this liability may be very little compared to the current system. In addition, OpenEdge points out, “Currently, the card networks will be charging the same interchange rates for EMV and non-EMV transactions. OpenEdge has no control over network interchange rates or knowledge of changes in the future.”

As it stands now you have a chance of additional liability on chargebacks in a situation where you would have won a dispute if you’d had an EMV reader and no extra charge per transaction whether you process with EMV or not. We leave the decision up to our customer’s as to whether they want to use EMV terminals or not but each business should definitely discuss the costs of upgrading to EMV devices with OpenEdge and balance that cost again their comfort level with the added liability. You can read more about OpenEdge’s handling of EMV at their EMV web site – don’t hesitate to call us with any questions at 937-832-3969 with any questions.

In order to prepare our software for these changes we’ve made many changes under the hood with our credit card processing and a few changes that you’ll notice with the flow of credit card transactions. Our first change – and one of the more important – occurred in our Maintenance area under Computer Info. We’ve removed the ‘Path to Credit Card Software’ box and replaced it with a much easier to use ‘Credit Card Setup’ button. This button will guide you through the setup of your credit card processing on that computer. Very important to note – especially for future versions of X-Charge that will mandate that you change passwords in X-Charge every 90 days – is the ability to set the UserName and Password for X-Charge within this section. This will be required once you’ve updated to make the X-Charge integration work correctly so everyone will need to set this up even if they’re already processing with X-Charge through the program. In addition, the system will ask for your Processing Account (or MID). This is the name that you’ll see in X-Charge when you go to Transaction and choose Processing Account. For most businesses already using X-Charge the system will automatically fill this in for you but for new customers or customers with multiple processing accounts for their independent contractors you’ll need to get this information from X-Charge. We’ve tailored the questions in this section to your setup so as long as you have the MID, UserName, and Password for X-Charge the setup in this section should be quick and easy but as always, please contact support with any questions.

The next most noticeable change will be with the flow of processing a sale. In the past, when Spa/Salon Manager processed a credit card sale there was no interaction with X-Charge until you’d swiped the customer’s card, printed their authorization receipt, had them sign it and write in their tip amount, entered the tip amount in our program, and clicked Continue. Due to the new PCI and EMV requirements we’ve moved away from this process. Now, as soon as you’ve clicked continue on the Check Out screen and the Credit Card form pops up you’ll notice X-Charge process the transaction. If you have an EMV device, Pin Pad device, Signature Capture device, or any of the other devices X-Charge offers that interact with customers these devices will then take over the sale and collect their information. If it’s just a standard credit card swipe sale X-Charge will prompt you on the screen to swipe the card. This represents a change to the current system but ensures that whatever device you’re using X-Charge will be able to take care of the card for you. Once you pass this step you can print your authorization receipt. That receipt will now have added information from the original sale including authorization codes, EMV information, and all other pertinent information to the transaction. Finally, you can add your tip before hitting Continue, when the program will adjust the sale to include the tip.

We’re very excited about these changes – they’re cleaner and they insure that even if the final processing hits a snag you still get paid for the sale itself as opposed to before where if you handed the card back to the customer before the transaction was complete you ran the chance of having them walk out without paying, and they ensure that whatever changes come in the future with the devices X-Charge offers we’ll be able to support them. The last change directly relates to EMV transactions. We’d hoped to offer EMV transactions without changing any functionality in the program but unfortunately the regulations on EMV with OpenEdge’s processors does require a couple changes. Specifically, those processors do not allow EMV transactions to be adjusted which has a couple effects on our software. First, for any customers that choose to use EMV devices their sales will no longer run as a Purchase and then Adjustment. Instead they would run as what’s called a Pre-Auth and then a Force. This means that one benefit we got from the new updates – the fact that if there’s a problem with the final processing of the card you’re still guaranteed to receive payment for the non-tip portion of the sales – goes away for customers using EMV. The second and larger issue is that since we’re prevented from adjusting EMV transactions you would no longer be able to change the amount on a credit card payment through Correction. The only method for changing a payment on a credit card transaction for businesses using EMV terminals would be to Void the transaction, contact the customer for the card information, and then re-run the sale. Please keep these limitations in mind when weighing the pro’s and con’s of utilizing an EMV device.

Some of our Cloud customers are already running the new version of the credit card processing and we should have all Cloud customers on the new version by October. For our customers using the installed version that would like to prepare their software for EMV, please contact technical support to plan your upgrade.