PayPal has presented Here Chip Card Reader, a new hardware that will enable merchants in the US to accept payments through NFC, including EMV-enabled cards, Samsung Pay, Apple Pay and Android Pay. The mobile card reader will become available for purchase from September 30.
In view of the growing rate of credit card fraud in the US, more and more merchants are switching to EMV, a global technology that ensures increased level of security. Many banks have already shifted to this type of cards to better protect their clients.
Unlike traditional cards, EMV cards store information on secure chips rather than magnetic stripes. Every time you use an EMV card, the chip creates a transaction code that cannot be utilized again, what significantly minimizes the risk of fraud. Even if hackers obtain data from the point of sale, it will be hard for them to get any profit.
EMV terminals are gaining more popularity each day and are already used all over the globe. Australia and the UK have already been using the reader for about two years.
Visa and MasterCard have recently claimed that from October 1, merchants who have not moved to EMV readers will not be subject to compensation for financial losses due to any point-of-sale frauds.
In addition to EMV chip card transactions, the Here Chip Card Reader will support traditional magnetic stripe cards as well. The hardware will be priced at $149, but retailers who process $3,000 during the first three months will be able to acquire the reader at $49. The new payment solution doesn’t include a monthly fee, but every swiped card payment will cost 2.7% for retailers.
The owners of the new hardware will have to install the PayPal Here app on their smartphones. After the merchant create an invoice for the customer’s order, PayPal Here Chip Card Reader will display all of the available payment methods, including card swiping, contactless card payments and tapping mobile phones to a payment terminal.
The idea behind the PayPal Here Chip Card Reader is similar to the concept of digital currency payments. However, in order to use EMV credit cards, customers have to tap their card on the terminal’s screen, what cannot be called a contactless payment method.
Moreover, bitcoin payments involve lower fees and are easier to use as the only thing necessary to complete a transaction is an internet-connected device. Meantime, retailers don’t need to have additional infrastructure to process bitcoin payments.