Like it or not the U.S. retail economy is heading toward the smart-chip credit card payment systems already standard in Europe, Canada and other regions of the world. Companies that make point-of-sale terminals are all updating their gear to accept these new kinds of transactions in the U.S. and Square is no exception.
The company said on Wednesday that it is preparing a new version of its Reader to process these cards as they make their way into consumers’ hands next year. It’s also launched a website to educate its merchant customers on what the transition will mean for their businesses.
Called EMV (which is shorthand for the technology’s developers: Europay, MasterCard and Visa), the payment technology uses an integrated circuit instead of a magnetic strip to transfer credit card data to a terminal. The big advantage is security as these chips are much more difficult to spoof than a simple mag-stripe.
Square said the Reader will be available for pre-order later this year, but it didn’t give a release date. You would have to expect it would be soon though. After October 2015, merchants will be required to accept EMV transactions so that means Square’s current and older Readers are on their way to obsolescence.
Square obviously wants to get these Readers to its current customers, but it’s likely also looking at it as a big opportunity to expand. We’re at a disruption point in the POS terminal industry, in which every merchant will have to change out its countertop card-reader technology. Some of those merchants now using other payment providers’ systems, may opt to switch to Square during the changeover.