From 1 August 2014, PIN will become the main form of card payment authorisation in Australia.

The industry-wide move to expand PIN authorisation at point-of-sale (POS) and phase-out signature as a form of verification on Australian credit and debit cards will take place over a short transition period from 1 August 2014, as POS terminals migrate to new software.

What is changing?

From 1 August 2014, customers will no longer have the option to sign for purchases using chip enabled credit or debit cards provided by Visa, MasterCard®, American Express or Diners Club. A Personal Identification Number (PIN) will be required to be entered at POS in Australia, with only a few exceptions.

Why is the change happening?

This is an industry-wide initiative to improve security. Transactions processed using a PIN are much safer than signing as there is only a one in ten thousand chance of someone guessing your PIN1. This initiative has been introduced to help reduce the number of disputed and fraudulent transactions you may experience.

Will there be any transactions that do not require a PIN?

Not all transactions at a POS terminal will need a PIN. The main exceptions are:

  • Contactless transactions under $100 - Customers can still ‘tap’ their chip enabled card on a contactless enabled terminal or touchpad to initiate the payment side of the transaction. When contactless is used, for any transaction under the value of $100 there is no need for customers to use their PIN or sign. For transactions of $100 or greater, you will need to ask customers to use their PIN.
  • Certain low value transactions under $35 will not require signature or PIN2.
  • Mail or telephone orders - these transactions can continue to be processed without a PIN.
  • International card transactions - where the cardholder has an international card.
  • Signature preferred cards - these cards may be issued by certain financial institutions to accommodate special needs of a cardholder and are subject to specific medical criteria.
  • Magnetic stripe transactions - generally on non-chip payment cards such as pre-paid cards and gift cards.

You do not need to be aware of these exceptions because, in each case, the terminal will prompt you as to whether a PIN is required or not

What happens if a customer does not have a PIN?

If a cardholder does not have a PIN, you will need to advise them to contact their financial institution in order to find out their PIN. In the meantime, you will need to ask for another form of payment.

How can I prepare for this change?

In order to prepare for the change, there are some actions that you can take with your staff and customers.

Many merchants currently ask their customers “PIN or sign?” at point of sale. If you wish to encourage your customers to use PIN, then you could simply retrain your staff to ask “Would you like to use PIN?” (or similar) at the point of card transaction.

Please note that you do not need to do anything to your terminal to give effect to these changes. From 1 August 2014, your terminal will be updated automatically to comply with the new requirements.

You can visit the PINwise website at www.pinwise.com.au/merchant for more information about the intiative and to register for the POS support kit which contains signage you can use for your store.

I own a restaurant/café. How does this impact my customers who want to tip?

Restaurants, pubs and cafes are among those retailers who will be most likely to notice the change. The extent of the impact will depend on how you currently process payments. 

For those that currently process tips using Tip@Table (Tip with Signature), your terminal software will be updated automatically to accommodate the change. 

Restaurant and café owners who currently use a fixed terminal may need to upgrade to a mobile terminal if they wish to process payments and tips using table service. Further details are set out below. 

What is Tip@Table?

Tip@Table is “tipping with signature” - the current way in which a lot of merchants process payments. Using this method, the merchant will take the customer’s card back to their counter and do a pre-authorisation transaction on their terminal for the amount of the bill. They will then print a receipt for their customer to sign and enter a tip if they choose to. The receipt is taken back to the counter to finalise the transaction by adding the amount of the tip into the terminal. From 1 August 2014, this method will no longer be available as there will no longer be the option to use a signature.

What is Tip@Terminal?

Tip@Terminal is “tipping with PIN”. This means that after the bill amount is entered into the terminal by the merchant, the customer is prompted to enter a tip if they choose to and will then authorise the payment with their PIN. The amount of the bill and the tip are then processed as one transaction to the customer’s account.

The advantage of Tip@Terminal is that only one transaction is required on the terminal, saving you time. Merchants also have the choice of taking the terminal to the customer at their table or asking the customer to pay at the counter.

What do I need to do to get Tip@Terminal?

If you currently process tips using Tip@Table (i.e. tip with signature) from 1 August 2014, your terminal with Tip@Table will automatically be changed to enable Tip@Terminal tipping. This will allow you to bring the terminal to the customer at the table and will allow the customers to add a tip to their payment prior to inputting their PIN. Please note that you do not need to change your terminal type for this software change to occur.

Do I need to upgrade my terminal?

If you currently have a fixed terminal and bring the receipt out to the customers to pay at their table rather than at the register, you may need to upgrade to a mobile terminal if you would like to offer table service. Over the next few months, we will be contacting restaurant and café merchants to offer upgrades to mobile terminals to accommodate this change3.

I am an ANZ cardholder too. What do I need to do?

Cardholders need to ensure that they have a PIN that they can remember.

If you have an ANZ credit card or Visa Debit Card, please see here for more information on how to use or change your PIN.

What if I don’t want to participate? Can I move to another bank to avoid this change?

This is an industry wide initiative that all financial institutions in Australia must comply with. All banks will be participating and therefore there is no possibility to avoid this initiative. Given that there is substantial advertising encouraging customers to switch to PIN, we expect that most customers will be prepared for these changes.

Where can I get signage for my store to explain the change to customers?

You can register on the PINwise Merchant website and follow the links to request a PINwise POS support kit.

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Where can I find out more information?

You can find out more information at the PINwise Merchant website.

If you have any questions about your existing terminal, you can contact ANZ on 1800 039 025 (24 hours / 7 days).

 

 

1 Source: PINwise
2 Only certain merchants will have this functionality turned on
3 Please note that fees and charges may apply

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