payleven

Small businesses wanting to accept credit and debit cards have plenty of choices in the USA, where swipe readers like Square are readily available, but far fewer in Europe, where a more secure smartcard technology called chip-and-PIN is used in place of magnetic stripes and signatures.

European cards have a tiny embedded chip with encrypted information stored on it. This includes a four-digit PIN number. To make a purchase in a store, the customer inserts the card into a reader and then enters their PIN on a keypad. The chip verifies that the PIN is correct before passing the transaction details through to the card company for authorisation. All in-person Visa transactions in Europe must use chip-and-PIN (there is a fallback option to swipe with signature, but then the merchant takes on the risk if the card turns out to be counterfeit or stolen).

Conventional chip-and-PIN terminals are expensive, typically costing $350-600 a year in rental fees – a pretty steep cost for a small business … expand full story