Payments

‘PIN on glass’ is still a novel concept for U.S. retailers

  • Mobile point-of-sale terminals with chip and PIN offer security and convenience for retailers, but there are hurdles to widespread adoption in the U.S.
  • Mobile chip and PIN with a physical card is a transitional step between card and mobile payments
close

Email a Friend

‘PIN on glass’ is still a novel concept for U.S. retailers
Though common in Europe, chip cards with PIN numbers still haven't caught on in the U.S. But a mobile chip-and-PIN terminal could nudge more retailers to get on board. Payments company Ingenico rolled out mobile card reading technology Wednesday that turns merchants' mobile phones into point of sale terminals. Similar to Square card readers, merchants connect an external device to their phones, only by Bluetooth. Customers are then prompted to enter their PIN numbers on the screen. It's currently being beta-tested in Europe. Chip-and-signature cards have become ubiquitous across the U.S.; as of December 2017, 96 percent of U.S. payment volume took place on chip cards, according to Visa. But chip-and-PIN cards are catching on much more slowly. Next month, however, major credit card brands are getting rid of signatures making room for PIN numbers to replace them. A mobile solution would makes it easier on retailers to roll it out cheaply. "This is a major win for retail merchants," said Michael Moeser, director of payments at Javelin Strategy and Research. "It drastically lowers the cost threshold for card acceptance; merchants will no longer be forced to buy expensive, dedicated point-of-sale terminals and PIN pads to accept cards." Over a dozen retailers contacted by Tearsheet declined to comment for this story, though some are testing mobile point-of-sale terminals. For example, more than 900 North American Gap stores are equipped with them, which the company said has resulted in more purchases made and higher customer satisfaction rates in those locations. While most large retailers have already invested in chip and pin technology, the cost may be prohibitive for smaller merchants. But large retailers could use the technology to roll out payment kiosks in areas of a store that may be far away from physical point-of-sale terminals. Mastercard, which worked with Ingenico on security principles and evaluation criteria for the PIN on Glass product, said it's applicable to a range of retail payment use cases. "Smaller merchants benefit from being able to start accepting electronic payments using their existing mobile device, and there are certainly benefits to other merchants involved with mobile point of sale solutions who may find the entry of PIN on the application as a compelling user experience," said Bruce Rutherford, senior vice president of security standards and solutions at Mastercard, in an email.

The interaction of a physical card with a mobile phone that's become a point-of-sale system can be seen as a transitional step from card to mobile payments, especially when mobile payment adoption is still low in the U.S. market.

Despite the advantages of a mobile point-of-sale with chip-and-PIN, there are hurdles to wide adoption. Larger retailers may still be reluctant to offer it, since it may affect loyalty schemes, offers and promotions, advertising and data analytics, Margaret Weichert, a principal in EY’s banking practice and the Americas lead for payments, recently told Tearsheet. Smaller merchants may also have to update their point-of-sale systems to do this.

"In many cases the micro merchant may not have the risk of fraud that EMV Chip and PIN prevents in the first place," said Brendan Miller, principal analyst at Forrester. "Micro merchants may know their customers personally, or are selling items that are not very enticing to a fraudster such as cup of coffee or sandwich out of a food truck."

0 comments on “‘PIN on glass’ is still a novel concept for U.S. retailers”

Lending, Payments

Can lenders improve the financial health of consumers through design?

  • Design can play a critical role in improving consumers' financial health when it comes to lending.
  • Research by the Financial Health Network shows that areas like defaults, making payments, and borrowing the right amount can be significantly improved through behavioral design principles, to ensure customers make decisions that improve their financial well-being.
Rabab Ahsan | May 26, 2023
Payments

5 questions with Zip CEO Larry Diamond

  • Payment act as a beachhead for financial services firms to more deeply serve customers, according to Zip's Larry Diamond.
  • We spoke to the payment firm's CEO about his new focus on the US and the future of the company.
Zachary Miller | May 15, 2023
Payments

Microsoft brings payments for businesses on Teams

  • Microsoft has collaborated with Stripe and PayPal to enable in-app payments for small businesses on Teams.
  • Connecting or signing up for one service – Stripe or PayPal – is required to set up the Teams Payments app, with support for GoDaddy in the cards.
Sara Khairi | May 11, 2023
Payments

Tokenization, programmable payments, inclusion: Unpacking near-term trends in the payments ecosystem

  • Very little appears to be staying the same where the payments industry stands in 2023 compared to where it’s headed in the next few years.
  • Tokenization beyond cards, borderless rails, credit for the underbanked, and the proliferation of payment acceptance options are some of the near-term trends in the payments ecosystem, suggests a new Mastercard report.
Sara Khairi | May 10, 2023
Payments

As Amazon Pay now offers Citi Flex Pay, will it help Amazon close the gap with PayPal?

  • Amazon has partnered with Citi Flex Pay to offer eligible card members the ability to pay over time at merchants who accept Amazon Pay.
  • Will gaining access to Citi's card network enable Amazon Pay to gain an edge over competitors like PayPal?
Rabab Ahsan | May 05, 2023
More Articles