Small businesses and retailers brace for pin-only purchasing

By Mozo ·

Retail and hospitality workers around the country come Friday 1 August will be dropping the catchphrase "Do you want to sign or use a pin?" at the point of sale as the new rules banning signature payments for credit card and debit card transactions come into effect.

The move to PIN is part of an industry-wide initiative to encourage the use of PIN instead of signature to help reduce the risk of card fraud. All Australian institutions that issue Visa, MasterCard, Diners and American Express cards will be upgrading POS terminals so that when an Australian chip card is inserted a PIN will be required.

There will be a short transition period so if your business's terminals have not been upgraded by your financial provider you will still be able to accept signature payments until 18 October, 2014. After this date, card transactions will be declined by the cardholders issuing bank when a PIN is not used for authorisation.

There are some exceptions to the PIN requirements, these include:

- Contactless Paywave, PayPass transactions under $100 that don't need a signature or PIN today

- Transactions made over the phone or internet

- Australian issued cards without a chip.

If your customers are from overseas they will still be able to sign or use a PIN for transactions. To help educate customers in the transition period PINwise has created a series of point of sale promotional materials which you can print off to display in your store or business. Also be sure to make it clear to customers what forms of payment are accepted at your business.

Will tipping cease? One of the biggest misconceptions about the move away from signatures is that businesses will no longer be able to collect tips from people paying with cards. There will be a move away from deferred tipping (where you enter the bill amount, customer adds in tip by pen at table and then you complete the transaction) to pay-at-table tipping. With pay-at-table tipping you enter the bill amount at the terminal, the customer then enters the tip directly into the terminal and then authorises the total bill via PIN. This is ideally done with a mobile or blue tooth terminal though if your business has a fixed line terminal customers can still tip but they will be required to complete the transaction where the terminal is physically located.

All businesses still unsure of the changes and what they need to do are encouraged to contact their card terminal provider to ensure that their is the minimal amount of disruption to business during the transition period.