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ARTICLE PaymentsJuly 21, 2014

What the PIN credit card system means for your business

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A PIN, instead of a signature, will be required for all physical, “card present” transactions in Australia from the start of August 2014. We speak to Australia Post’s Head of Payments, Richard Mann, about what the changes mean for bricks-and-mortar and online retailers.

From 1 August 2014, consumers will no longer be able to sign for debit or credit card payments – instead, they will need to enter their personal, secure PIN.

The PINwise communication campaign is being led by the Industry Security Initiative, a collective of Australia’s major financial institutions and card providers. The initiative aims to reduce the incidence of fraud and make paying with a card even more secure.

Australia Post’s Head of Payments, Richard Mann, outlines how the “card present” changes will affect retailers, including e-commerce businesses, and what you need to tell your customers about the changes.

Who is behind the “card present” changes and what are these aimed at achieving?

“This initiative is all about reducing the incidence of fraud in Australia. The major card schemes, including Visa, MasterCard, American Express and Diners Club, have come together to form the Industry Security Initiative. They have agreed to stop using signatures, to help minimise fraud. Australia has very high credit card usage compared with the rest of the world, but we also have very low fraud rates. This initiative is aimed at reducing fraud even further.”

Useful links

PINwise is an initiative of the Australian payments card industry to encourage the use of PIN instead of signature.

What types of business are affected by the changes?

“Anybody who has a terminal in their shop or location and accepts card payments – that is a ‘card present’ transaction. It will also affect retailers who use a terminal at markets – it applies to any terminal where a card with a chip is used. All of those transactions will require a PIN from 1 August 2014.”

What do bricks-and-mortar businesses need to tell their customers about the changes?

“Businesses don’t need to tell their customers anything – the financial institutions and PINwise are leading communications. However, as a business, you should be aware that you may have some customers who have always used a signature, and they won’t be able to use that option from 1 August. You might need to remind them about the changes.”

Are there any exceptions for people who still want to use signatures?

“No, people won’t be able to opt to use a signature. Some people, however, will still be allowed to use a signature, if they have a special dispensation due to disability. International cards may also still need a signature – for instance, many American cards still use signature, and some don’t even have a chip.”

How does “card present” affect online and phone payments?

“The changes only affect ‘card present’ transactions – they do not apply to online or phone payments.”

How does “card present” affect the contactless ‘tag and go’ payment option?

“Contactless transactions above $100 will require a PIN from 1 August 2014.”

With the tightening of security around “card present” payments, how are online payments being made more secure?

“The online industry does not have a visible plan similar to the ‘card present’ initiative. The online industry has, however, worked hard to make transactions more secure, including 3D Secure , which is a fraud mitigating service. Visa and MasterCard are particularly focused on reducing the incidence of online fraud, but it is more complex than ‘card present’ transactions, as there is no PIN required for online payments. SecurePay supports existing card scheme anti-fraud systems and it also has its own FraudGuard product that identifies fraudulent behaviour."

Did you know?

SecurePay has a number of products aimed at making online transactions more secure, including FraudGuard. 3D Secure has also been pre-integrated into the DirectOne, SecureFrame and Direct Post solutions.

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