So what the heck is a chip card anyway? In short: it’s a new credit card standard set forth by Europay, MasterCard, and Visa (the initials of each = EMV).
Chip cards, with their embedded “chips,” were designed specifically to eliminate counterfeit credit cards in retail environments.
The way it works is that the chip on the card contains a microprocessor that can store information securely and perform cryptographic processing during a payment transaction.
Chip cards carry security credentials that are encoded by the card issuer at personalization. These credentials, or keys, are stored securely in the EMV card’s chip and are impervious to access by unauthorized parties.
In a nutshell, an EMV chip credit card makes it next to impossible for a criminal to make a “fake” of your credit card. Magnetic stripes are easy to fake; Embedded computer chips are hard – too costly and complicated for a criminal to replicate. This is important because…
What does this really mean for my school?
In reality, it means very little. Most studios today that are accepting credit cards have next to a zero fraud rating.
Why is that? Can you imagine a parent trying to pay for several months of classes for their son or daughter with a fake credit card? It’s practically unheard of.
This means that you can rest assured that, even if you are not taking cards in a retail setting – face-to-face with a chip-ready terminal – using batch auto payment features in popular studio management software, like ClassJuggler, won’t increase your chance of fraud.
Besides, unless you do a lot of retail sales, you likely don’t use a terminal so don’t need to worry about chip cards. However, if you are doing a large amount of retail sales, a chip terminal will reduce or eliminate any chance of fraud.