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