U.S. Parking industry: Are You Ready for October 2015?
Chip and Pin is Coming and You Canít Stop It.
This is largely due to the increase in education across the payments, tech and financial industries on “EMV,” or “chip and PIN” smartcard technology, an updated and more secure standard of consumer card payment, originally set up by Europay, MasterCard and Visa, and launched in the 2000s around the globe – except in the U.S..
Finally, in the U.S., Oct. 1, 2015, marks what is known as the EMV liability shift deadline. On that date, the least-compliant party in a transaction (either a card issuer or a merchant, such as a parking operator) will be held liable for fraudulent transactions if that party is not compliant with EMV standards.
Put simply – as parking operators are realizing this date is nearing, the fear becomes real that if they do not figure out what actions are required on their end (as the merchant in a transaction), they will be held responsible for lost revenues resulting from fraudulent transactions.
Some U.S. operators are looking toward their counterparts around the globe as to how they upgraded to the standard, as the U.S. is significantly behind the rest of the world in “migrating” to the payment standard. (The UK, for example, completed its migration to EMV in February 2006, and Canada is well on its way to being fully migrated as well.)
As a result, U.S. parking operators can look to those other countries that have successfully migrated as examples to turn to for best-practices and lessons learned.
So what is required for parking operators to become educated on the EMV liability shift, and what will this cost? What actions do they need to take to become EMV-ready in time for the Oct. 1, 2015, deadline?
It’s going to require much more work, and a serious investment in time, than simply purchasing a new point-of-sale (POS) system designed to accept chip-embedded cards. The magnetic stripe system currently in place in the U.S. is, rightfully, on its way out, making way for a new and improved payment landscape.
Upgrading Your Hardware
One of the biggest debates at the moment from U.S. merchants migrating to EMV (whether in a parking, retail or other environment) is how to provide the same experience to customers with an EMV transaction that was provided with the soon-to-be-outdated magnetic stripe system.
For U.S. parking operators migrating their systems to EMV transactions, this can be answered by addressing the question of what cardholder verification methods (CVMs) the operator wants to support.
As manufacturers of parking meters and paystations are upgrading their card-reader equipment to EMV, operators have three options:
Supporting Chip and PIN — Does your current hardware support debit cards with a PIN (personal identification number)? If so, and you’d like to continue to offer customers this option, you will need to purchase and support a “PINpad.” However, if you do not currently support debit cards with a PIN, you may not choose to support chip and PIN. Most parking garages within the U.S. do not. Purchasing a PINpad does, however, have an extra cost on top of a system that does not incorporate one.
Supporting Chip and Signature — Similar to the magnetic stripe system currently in place for credit cards, chip and signature requires an actual signature from the customer to verify the transaction. This requires the parking operator to have a face-to-face payment, with a parking attendant to manage the transaction.
Unattended — For the most part, because many U.S. parking environments are unattended, they do not require a PIN or a signature. In these cases, the customer simply waits until the transaction has gone through and is then able to complete the payment, requiring neither a PIN entry nor a signature.
No matter what hardware or type of transaction that a parking operator chooses to adopt when upgrading to EMV, it’s important that, by Oct. 1, 2015, they have updated their terminals to be able to read a chip card.
Certifying for Chip
Almost all U.S. parking operators are underinformed on the time required to complete all the different layers of certification before their EMV-enabled solution can go live. In mature EMV markets, certifications take from 10 to 16 weeks, usually requiring “test tools” and cards that also have a hefty price tag attached. However, if parking operators manage to budget enough time for these required certifications, migrating to the EMV standard becomes a much more seamless process.
Operators also are considering the benefits of Payment Card Industry point-to-point encryption (PCI P2PE), another layer of security on top of EMV. This added protection is designed to decrease the chances of sensitive consumer card data being stolen. While supporting PCI P2PE does mean additional hours and money investment, most devices being offered to U.S. parking operators that are upgrading to EMV are able to support the standard.
What About ‘NFC’ Payments?
Many parking providers have begun to look into another technology that once seemed futuristic: Near-field communications (NFC), or “contactless” payments. NFC payments simply require the customer to wave their smartphone over a small reader in the paystation. But what would it take to support EMV and NFC?
As a parking operator, it’s important to know that if you want to support what some are calling the “next generation of payments,” you must support contactless payments. To do so, you must look to a card reader and a contactless reader that support both EMV payments as well as NFC payments. This can be either unattended or attended (e.g., chip and signature).
If you choose to enable PIN debit with your NFC-enabled device, you will be choosing to support all three, which requires you to purchase a PINpad. However, many parking providers are currently choosing not to explore contactless NFC payments, as it requires them to buy and maintain the additional piece of hardware.
U.S. parking operators are showing concern and interest over the Oct. 1, 2015, liability shift deadline for the EMV standard, largely in part because they do not want to be responsible for lost revenues.
As equipment manufacturers continue to upgrade their hardware products to support the new payment standard, operators also need to quickly start doing their homework on how they plan to upgrade to the standard, so that they are able to make the fast-approaching deadline, now less than a year away.
If they do not, they risk being held liable for large amounts of money due to potential fraud caused by an outdated form of consumer card payments. Moreover, by choosing to upgrade to the EMV standard, parking providers are protecting their customers from being susceptible to card fraud.
Contact Jeremy Gumbley, Chief Technology Officer at Creditcall Ltd., at email@example.com.