Understanding EMV Liability Shift in Regard to PIN Transactions

Category: Sterling News

POS systems offer different options when it comes to processing PIN-based debit and credit card transactions thanks to EMV. Merchants can enable and disable the PIN entry for PIN-based EMV cards allowing cardholders to make the decision whether to enter or bypass the entry of their PIN. Disabling or bypassing the security around PIN has various implications, which resellers, ISVs, and merchants should be aware of.
With US issuers (albeit, a small number of them) and most non-US issuers distributing PIN-based chip cards, any merchant that processes EMV transactions may receive a PIN-based EMV card. Majority of the time, the cardholder enters their PIN and the transaction just processes normally. However, there are a lot of merchants who are unsure on how to process PIN-based transactions in situations where inline tip (tip prompting) is not the most pragmatic choice. An example of this is restaurants that offer table service where the merchant does not have a pay-at-the-table terminal. In those particular situations, the POS application could be prompting for a PIN with the cardholder sitting at the table, leaving the merchant unsure on how to proceed. Beyond that, PIN-based transactions cannot be tip adjusted because that defeats the security advantages of a PIN. Merchants have been asking about the options that are out there to disable or bypass PIN entry in those certain cases.

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