| | May - 20188CIOReviewSEMI-INTEGRATION GOES TO THE CLOUD AND GROWS UPBy Jeff Zimmerman, COO, ClearentBy now, every retailer should be aware of how influential a quick and efficient point-of-sale (POS) transaction is on its customers' shopping experience. But retailers may not be aware of just how critical it is to move their semi-integrations (ones that are compliant with the payment card industry's EMV standards) to the cloud. This is critical because it continues delivering top-notch satisfaction in the most cost-efficient way.And for context, EMV--short for Europay, Mastercard, and Visa--is the acronym that represents the technology behind those little square chips on your credit cards.The View From the Retail FloorGiven the variety of online shopping options available, a customer's motivation to visit a physical store has less to do with price and more to do with the positive emotional and physical effects the store delivers. This includes tangible elements like layout, lighting, selection, and attentive sales associates. Then it moves right to the transaction. The checkout process must never be perceived as a tedious retail formality--it is as much a valuable part of the shopping event as anything else.A smooth, secure payment forms part of a chain of activities a retail enterprise must perform repeatedly. It's not just about accepting payments; it's also about tracking inventory, scheduling appointments, and logging staff hours. This is the essence of the retail business. It becomes much easier when this is done within one software solution, which is why merchants turn to independent software vendors (ISVs) to develop and deploy POS and business management software.But deployment of software is not a one-off. Commerce is an evolving business, and all the elements that support it--including speed, reliability, and security--continue to push new boundaries.EMV and the Liability ShiftOne highly significant boundary change happened soon after EMV (or chip cards) became the global standard for secure POS transactions, replacing magnetic stripe cards. In October 2015, to push the adoption of this new and more secure technology, liability for fraudulent in-person card transactions moved from banks to retailers. This was particularly urgent in the United States, one of the few countries that still allowed magnetic "swipe" cards. The statistics spoke for themselves. According to CardHub, "Nearly half of all credit card fraud occurs in the United States, even though only 25 percent of transactions take place here."The so-called "liability shift" forced business owners and software vendors to scramble. ISVs had to quickly become EMV-certified to make the technology available to their customers. The challenge was (and still is) that full integration is costly. With full integration, POS providers own and maintain their entire payment system. Encrypted card holders and transactional data remain on their systems and must be sent for processing through their internet connection. Building, maintaining, upgrading, and certifying a fully integrated, compliant system becomes cost- and time-prohibitive for small and large ISVs alike.According to a 2017 report by the National Retail Federation and Forrester Research, almost 60 percent of merchants that installed EMV equipment were unable to use it: They were waiting for system certification. The majority of merchants had been waiting six months or more.Jeff Zimmerman
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