Equipment and software certification continues to be a major holdup when it comes to implementing EMV-chip card acceptance at the point of sale. Some providers say they have found a worthy work-around in the form of semi-integrated EMV systems.
Semi-integrated systems have specialized software that has already undergone the EMV certification process with each card brand. That means once developers implement this software, chip card terminals can be up and running much faster than with a full certification. In many other markets, semi-integration is the standard.
It's a technique that can help address the merchants that have chip card terminals in place, yet are still having customers swipe their cards. As of September, 57% of merchants reported that they had installed EMV equipment but were still unable to use it because they were awaiting system certification, according to a report by the National Retail Federation and Forrester Research. Of those, 60% had been waiting six months or longer.
In a traditional setup, the payment terminal is connected to the point of sale, which then sends data to the payment processor. With a semi-integrated system, the terminal is connected to the payment processor, and the point of sale sends data to the terminal.
“That way, your point of sale never receives any sensitive information, and the terminal is managed through the payment processor. So you don’t have to manage all those certifications, upgrades and changes,” explains Rick Oglesby, president of payments consultancy AZ Payments Group.
Proponents say these systems offer merchants a faster, more affordable alternative to having to wait several months to have their EMV hardware and software fully certified.
Even though semi-integration has been an option for a while in other EMV markets, Oglesby says it’s finally starting to catch on now that the U.S. has adopted chip card payments. Before the EMV migration, semi-integrated systems were practically non-existent in the U.S., he says.
As of July, almost 28% of all U.S. merchants reported they were able to accept chip cards, according to Visa. “I’d be shocked if at least half of those merchants weren’t using semi-integration,” Oglesby says.
Dejavoo Systems is one software vendor that has been deploying semi-integrated systems to help merchants speed up the process of upgrading to fully integrated EMV terminals. In 2016, the company partnered with TSYS to certify all of its devices for EMV. The certified terminal would then talk to an existing point of sale system and provides a direct TSYS connection, allowing merchants to run all transaction types within hours instead of days. Dejavoo has interfaced about 100 POS systems in less than a year.
Merchants pay a one-time cost for hardware, which reduces the costs involved with EMV implementation. And because card data is stored in the Dejavoo terminal, the PCI scope is reduced at the point of sale.
“The EMV responsibility moves back to the vendor, like the good old days,” says Mony Zenou, president and CEO of Dejavoo Digital Systems.
Proponents of semi-integrated systems also say these systems add another layer of security by preventing sensitive cardholder information from making its way onto the POS or merchant’s servers.
“It’s safe. It’s easy. It’s quick. And it separates the responsibilities,” Zenou says. “The point of sale system takes care of point of sale, inventory and sales logic. Credit card terminals take care of payments.”
Michael Dinnen, owner and CEO of merchant services company ePayData Inc. who also has a partial ownership in Dejavoo, says U.S. merchants are still warming up to the idea of semi-integrated systems. Many of them still are not aware of the option, while others know about it but are reluctant.
“I would assume there are a lot of other ISOs in the retail space that are having that issue with a lot of their merchant base,” he says.