Automatic Merchandiser serves the business management, marketing, technology and product information needs of its readers including vending operators, coffee service operators, product brokers, and product and equipment distributors in print.
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readers yet, but to make sure to pur- chase EMV readers when they are installing new equipment in order to get the most out of their investment. Within fve years, Spinella expects 90 percent of the credit cards in consumer pockets to be EMV. "My thought is initially, the transition will be very slow," he said. "But in 2015/2016, we're going to see it change over." The change will come as terminals are upgraded and replaced with EMV-capable models and the consumer is educated about what to look for, Spinella adds. Canadian vendors Canada has been using EMV cards for years. The liability shift the U.S. is expecting in 2015 happened there in 2010. "Card associations are learn- ing from the EMV shift in Canada," said Paul DeRosse, vice president of business development, Canada, for Apriva. In Canada, the chip cards also require a pin be entered, however, not necessarily at vending machines. "The pin isn't required if the transaction is below a certain value," said DeRosse. That value is assigned by the bank issuing the card. The one caveat is that the Canada chip and pin cards need reauthenti- cation every so many transactions. A consumer must use the card at a merchant with a pin pad in order to reauthenticate the card. It's a tradeoff Canadian users are willing to make. "Consumers haven't found it to be an unsatisfying experience," said DeR- osse. "Canadians as a whole are more security conscious and willing to give up some convenience for that. The U.S. might be different." Updating the reader "EMV really ups the game in terms of security and an investment by the operator," said Chuck Reed, director of marketing and sales operations at newly merged MEI and Crane – Crane Payment Innovations (CPI). Previously, there weren't any read- ers on the market that could read EMV cards. Operators adding the technology would need to retermi- nalize, explains Reed. A few years ago, merchants had to prove they were Payment Card Industry (PCI) compliant — as secure as they could be. "EMV is different," warns Reed. "PCI is behind the scenes…with EMV there are physical changes to the hardware." In the retail world, cashless ter- minals are replaced more often, so reterminalization isn't new to them. However, vending operators keep a close eye on their investments and want the card readers to last at least 10 years, said Patrick Richards, cash- less product manager — vending man- agement services at CPI. This means installing EMV readers isn't going to happen overnight. "It has to make sense for the operation," said Rich- ards. Vending operators should con- sider the consumer's reaction. Before the Target breach, consumers didn't worry about security, but afterwards, consumers became more sensitive to using their cards at this merchant and Target took a 40 percent loss in sales during the 2013 holiday season, warns Richards. While fraud at the vending machine is unlikely to hap- pen, a consumer whose credit card is unwittingly stolen is going to be look- ing for security measures, especially if the fraud is tracked back to a vend- ing machine. "Vending as a whole could be perceived as less secure than retail," Richards said. As operators prepare for the future they need to look closely at which cards they will be accepting and buy the terminal based on that. Richards says it's easy to know if a card reader is capable of reading/ accepting an EMV chip card, the card has to physically stay in the reader during the transaction as data is transmitted back and forth between the reader and the chip. '' EMV really ups the game in terms of security and an investment by the operator. '' – Chuck Reed, director of marketing and sales operations at Crane Payment Innovations Chip and pin vs. chip and signature debate EMV cards are coming to the U.S., but one of the questions that remains is whether the EMV card will need to be used with a personal identifcation number (pin) or a signature at the point of sale. A pin is used in Europe and Canada, therefore is well documented. However, Americans are more familiar with a signature card, as it is what is required with most current credit card pur- chases. This issue has yet to be decided by the major credit card brands. If either is re- quired at a vending machine, it will be a costly addition, but it is also unlikely due to the low transaction amounts of vending purchases. 58 Automatic Merchandiser VendingMarketWatch.com April 2014 E M V T E C H N O L O G Y autm_54-61_0414EMV_F.indd 58 3/24/14 4:46 PM