As the October liability shift draws ever nearer there have been reports coming out suggesting the US is less ready for the introduction of EMV-enabled cards than previously expected.
It has also been suggested that the increasing popularity of Apple Pay and recent launches of Android Pay and Samsung Pay may lead to people skipping over the Chip-and-PIN technology straight to mobile payments.
All in one
All these changes and innovations up in the air do not appear to faze PayPal as it releases a new reader that wholeheartedly embodies the concept of hedging all bets.
Named PayPal Here, the reader will work on both iOS and Android platforms; it will accept chip card transactions; magnetic stripe and contactless cards. That means it will work with Apple Pay, Android Pay, Samsung Pay and any other NFC-enabled device or card. It will be released in the US today.
PayPal VP and general manager Brad Brodigan explains the importance of creating a device that plans for the future:
“Beyond the need to accept chip card payments, merchants should view the liability shift as an opportunity to upgrade and modernize their Point of Sale systems with the latest technology that enables them to sell online, on mobile and in-person all with the same account. Future-proofing with a solution that already accepts multiple forms of payment is key to being prepared for new technologies – like contactless payments.”
Reader in action
Whilst it will be a novel technology in the US, British and Australian have been able to use the EMV reader for almost two years. Here is the video from the UK website that shows it in action.
PayPal trying to ‘not get left out’
Howard Allen, development director at the money transfer app Payfriendz, believes that this reader is an obvious move and doesn’t necessarily add anything new.
“I mainly see it as another example of a payment player making a move ‘to not get left out’ rather than addressing a clearly unmet customer need in an innovative way. I think there is a long way to go for that endgame in the US to play out,” he told PaymentEye.
Liability shift approach
In broader terms of the liability shift, Howard has reservations about implementing any sort of changes purely based on liability considerations.
“I think you basically provide something that the consumer wants and then you deploy the appropriate risk management techniques to mitigate risk and be able to operate commercially.”
He goes on to say that any strategy based on liability shift considerations will be “flawed”, but likewise a strategy that doesn’t take any liability shift considerations into account will also be flawed.
Filling in the gaps
In terms of how significant the reader will be when the shift happens, Christopher Uriarte, chief Strategy & Payments officer at Vesta Corporation believes readers such as these will play an important role.
“While large merchants have been preparing for the shift to EMV for years, many small merchants have not had made the transition to EMV a priority. With the introduction of chip-compatible readers through PayPal and other leaders, like Square, the proliferation of EMV-compatible technologies can quickly reach a larger scale across America without requiring a huge investment by small and medium merchants,” he told PaymentEye.
He went on to say that by being useful to smaller businesses, readers such as PayPal’s will be able to fill in the the final gaps in EMV acceptance throughout America in the coming year.
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