Information on Merchant Accounts,
Ecommerce and Credit Card Processing

December 7th, 2006 by Jamie Estep

Will unembossed cards kill mobile merchants?

Filed in: Industry News, Merchant Accounts |

In another well planned act of complete corporate brilliance, Visa and MasterCard are going to start making and distributing unembossed credit cards in the US.

An unembossed credit card is a card where the numbers on the card are not raised up like a normal card. It is perfectly flat, with everything just printed on the card.

Where’s the problem?
Unembossed cards completely eliminate the ability to manually imprint that card. Many restaurants and retail businesses use a manual imprinter as a backup processing method, and there are also mobile businesses that use nothing but a manual imprinter. These businesses are not going to be able to imprint their customer’s credit card, which opens up a door for chargebacks.

Both Visa and MasterCard avoided giving any straight answer as to what merchants can do to prevent a chargeback if the accept an unembosed credit card, or even a sufficient method for accepting the unembossed cards. Visa was nice enough to suggest to not accept unembosed cards, and instead ask for another form of Visa for payment!!! MasterCard’s unembossed cards have the text “ELECTRONIC USE ONLY” on the card itself, suggesting that there will be no reduced liability for any business that accepts that card manually.

Mobile businesses are going to suffer:
Many mobile businesses are not able to afford expensive wireless equipment, or there isn’t sufficient cellular coverage where they do business to justify a wireless terminal, or their situation just doesn’t call for a wireless terminal. The card issuers have taken the first steps to close the doors on these businesses, who may still make up 50% or more of all mobile businesses.

Also, these cards will be much easier for thieves to duplicate, as the hardest part in making a fake card is the embossing.

It would be nice for once, to see the card companies do something to help the businesses that accept cards.

What should mobile businesses do?
There are a few options. As Visa suggested, you could ask your customer for a different form of Visa. You could take the card anyway and accept the extra risk of a chargeback (I think that this will most likely be the rout that most affected businesses take). you could throw down the $500+ for a wireless terminal. You could just not accept the card.

There really isn’t a good answer for what businesses should do. This really places mobile merchants in a awkward situation, as most need to accept cards just to make money, and they are the only group actually affected by this change. All this trouble for businesses just so Visa and MasterCard can save a few cents on every few hundred cards that are produced.

MasterCard’s Unembossed Card Program for Merchants

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