Ingenico's Roam is launching a mobile card reader with chip and PIN acceptance, and it expects U.S. merchants will want to use it to accept PIN debit transactions even before EMV-chip cards become widespread.
Roam "already has a number of resellers and potential major merchants who have expressed interest," says Ken Paull, CEO of Roam. "As things migrate towards chip and signature there still won't be that ability to take PIN debit but larger merchants want to be able to replicate all the payment types they take in the store today."
Most mobile card readers in the U.S. today do not accept PIN debit transactions, Paull says.
Typically, devices that can handle PIN payments are built to accept EMV card payments outside the U.S. For example, the U.S. version of PayPal Here reads only swiped card payments, but the U.K. version can read EMV-chip cards and has a built-in PIN pad. Jusp, payleven and iZettle also offer chip and PIN card readers in markets that have already migrated to the EMV standard.
Merchants who are adding mobile payments or preparing for EMV cards will want a product that accepts PINs, Paull says.
"There's even new alternative payments schemes that would prefer to use a secure PIN pad as well such as prepaid schemes," he says.
Formerly, Roam's clients could accept only chip and signature transactions, magnetic-stripe cards and Near Field Communication contactless payments.
The new card reader, the RP750x, is a separate device that connects to a merchant's smartphone through a Bluetooth signal. The RP750x can also connect to tablets and even feature phones with a cable that plugs into the device's audio jack. Roam's point of sale systems are cloud-based and white-label.
Roam has decided against the connected "dongle" approach for PIN-based transactions, which plug into a phone's audio jack or data port. These devices won't be durable enough for the pressure of pushing keys and could damage the dongle and the mobile device's port as well, Paull says.
While mobile card reader manufacturers could build an app that displays a PIN pad for consumers on the merchant's smartphone or tablet screen, Paull says this method is not compliant with the requirements of the major networks because of skimming concerns.
Also "there are concerns with a lot of merchants who don't want their sales agent handing their device over to the consumer," Paull says.
Since Target's massive card data breach last year, EMV security has been in the spotlight. Many more merchants will look to add EMV security at the point of sale as the card networks' October 2015 liability shift deadline approaches.
EMV is designed to make payment cards harder to counterfeit, though the U.S. payments industry is divided over whether to require the use of a PIN for EMV card payments.
"It's still very unclear how the U.S. market will evolve," says Paull. But, he says, the U.S. won't move to chip and PIN "other than niche markets where they care a lot about international travelers."
One reason signature-only mobile card readers are so prevalent today because they are less expensive to produce, he says.
"A chip and signature dongle might be at a 2:1 ratio with a magstripe only reader; a chip and PIN reader might be in the magnitude of five times that of a magstripe reader," says Paull. "You're really adding in quite a bit of technology in to support the encrypted PIN pad," he says.