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Chipping-in: nonprofits slow to install credit card readers.

A little over a half-year Into the broadened use of EMV chip credit cards in the U.S., nonprofits have taken to the technology In a similar fashion as a retail line full of EMV card users. Slowly.

Jon Biedermann, vice president of DonorPerfect CRM Fundraising Software in Horsham, Pa., said that he was unaware of any of the company's 10,000 clients using chip-card readers at point-of-sale locations. Cost is certainly a factor. A new point-of-sale terminal can run an organization upwards of $500 to $700 apiece. More simplistic readers range from $100 to $400.

Nonprofit managers must decide whether the cost is worth the potential risk of a chargeback, which is when a customer disputes a charge and the credit card company sends a notice for the vendor to pay back both the cost of the item and a fee ranging from about $15 to $25. Merchants that do not use chip readers became liable for counterfeit transactions beginning on Oct. 1,2015.

Organizations might be victimized by online fraud, but point-of-sale issues are exceedingly rare, Biedermann said, adding that he has never heard of a case of fraud at a charity golf outing or auction, for instance. "The fact of the matter is nobody is stealing cards and then going to a charity auction and buying a painting," he said.

EMV chips are more difficult to fraudulently replicate than magnetic stripes, but provide no additional security in the case of a lost or stolen card. Europeans use chip cards in a "chip and pin" system, in which users must both use the card and enter a pin number. The U.B.'s "chip and signature" system is "a joke" Biedermann said, as few pay little attention to signatures. "In the industry we call it 'chip and pray,'" he said. "You pray that somebody is checking the signature."


There are exceptions. The Huntington, an art collection, garden and library located in San Marino, Calif., was an early adopter of the technology, according to Susan Turner-Lowe, vice president for communications. The Huntington has about 10 readers total, located both at service windows in the visitors center and in the store.

Adoption was out of character for The Huntington, as it isn't exactly known for being on the cutting edge of technology, TurnerLowe joked. The decision came after discussions between a small group of senior managers and technology staff. "We felt we'd need to do it anyway," Turner-Lowe said of the organization's early adoption. "We're fairly risk-adverse so we chose to do it."

The Huntington worked with its bank to bring the new readers aboard and the transition was seamless. Turner-Lowe said, anecdotally, that the majority of the merchants she patronizes are set up with chip card readers. Organizations' adoption should be viewed case by case, she said, with the size of the operation likely playing a factor.

The Salvation Army is about halfway finished with converting associated stores to chip readers, according to Tim Raines, marketing manager.

Ingenico, headquartered in Paris, France, has identified mobile card readers as a tool that organizations might be more apt to use, according to Ben Wagner, solutions marketing manager, North America. Few nonprofits might have an opportunity to utilize a point-of-sale terminal, but mobile devices allow for street solicitations and uses at events and pop-up shops.

A wide variety of payment methods can be accepted depending on the mobile device, including EMV chips, contactless options such as Apple Pay and even chip-and-pin cards. Nonprofits of varying sizes have taken to similar devices, but the differences have been on the application side as larger groups have sought In-house customization. Some organizations have integrated payment processing with existing donor management resources.

Wagner referenced reports of EMV readers increasing in popularity overall. The Strawhecker Group, a payment consulting firm, reported that about 37 percent of U.S. merchants were able to accept chip cards as of February, with a June estimate of 50 percent. Reports of fraud and merchant liability have driven additional demand, Wagner said. "I think adoption had been slow at first, but it's definitely picked up."
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Title Annotation:FINANCE
Author:Segedin, Andy
Publication:The Non-profit Times
Date:Jun 1, 2016
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