The EMV migration in the U.S. has driven the market to rethink its traditional approach to payment security. Today, both merchants and solutions providers are seeking a more flexible, semi-integrated approach to help streamline their payment processes and manage PCI scope. To gain more insight into the advantages of semi-integrated payments, we recently caught up with a few industry experts.
Watch the video below:
What is a Semi-Integrated approach and how does it differ from a fully integrated payment environment?
Marc Freed – Finnegan, CEO, Index:
So if you look at how payments have worked in store, once upon a time, everything was non-integrated payments. You had your cash register, kind of a calculator where you would add things up. Then your payment terminal, your pin pad was totally separate. You can still see this today outside of the US largely but also in smaller retailers where the cashier does the math, then comes over and enters the total into the pin pad. So that’s non-integrated things. Obviously the evolution was integrated payments where the pin pad became a peripheral to the point of sale, really leveraging the point of sale internet connection. The challenge though is passing all the payment data through the point of sale is really cumbersome. It exposes that data to a potential breach if the point of sale is compromised especially if that data’s not encrypted. So with a semi-integrated model, it’s a lighter weight communication between the pin pad and the point of sale.
Craig Tieken, VP of Product and Integrations, TSYS:
Basically, what it does is it takes the payment application and it puts it in a terminal device. The software talks to the terminal device and says, “I need some amount of money.” The terminal is a hardened lockdown piece of equipment that is much more secure than your average PC or even a tablet. So the terminal goes and handles all the card data. It gets the response back from the authorization processor and sends truncated data back to the software. So there’s never an instance in the software where true card data is either passing through or being stored in the system.
How do merchants benefit from semi-integrated payment solutions?
Craig Tieken, VP of Product and Integrations, TSYS:
The merchant benefits from a semi-integrated solution really center around security. So, if you think about the trends that are happening in cybercrime and data breaches and cyber attacks upon different form factors, PCs, Android phones, tablets, whatever the case may be, semi-integration eliminates the vast majority of that.
Semi-integrated helps ease EMV migration by simplifying the means of how a merchant has to comply. Basically, take a software upgrade from your software provider, plug in a terminal. The heavy lifting of all the EMV certifications and all the transaction processing now is based out of that terminal. So from a merchant’s perspective, they can focus solely on their point of sale. What does my point of sale need to do so that I can sell my goods and services? Let the payment terminal handle the payments and the two don’t have to mix. That’s the benefit from a merchant’s perspective. It’s ease of use of the initial installation, but even the ongoing maintenance and upgrades of the solution to stay compliant over time.
Marc Freed – Finnegan, CEO, Index:
When you can de-couple point of sale from payments, you have two parallel devices that have a lightweight communication over IP, but it allows retailers to very quickly deploy point-to-point encryption, NFC, enable EMV, no longer having to sort of wedge the tender through the point of sale, both environments are free, it’s very flexible, you can iterate quickly and deploying EMV or whatever new tender or security innovations comes next, it’s just a very simple project.
How do processors and independent software vendors (ISVs) benefit from semi-integrated payment solutions?
Christopher Kronenthal, CTO, FreedomPay:
I think semi-integrated is going to be an interesting solution for processors. I think from a processor perspective, especially the ones that own their own point of sales, it makes perfect logical sense that you would want to drill into a semi-integrated solution because it’s the fastest time to get development set up and there’s some other operational benefits to that.
Where does the biggest opportunity for semi-integrated solutions lie in the US?
Craig Tieken, VP of Product and Integrations, TSYS:
I think what will happen is as solutions become available, adoption of these solutions will take off rapidly. The simplicity of how you stay compliant with today’s technology through a semi-integrated solution is far greater than it is if you did a traditional payment method where you’re pushing payments all the way through your software application to get your authorizations and payments.
Ian Drysdale, EVP of Sales & Business Development, Elavon
We believe there is tremendous opportunity with semi-integrated. We are making huge strides in the medical space and we are making huge strides in the hotel space. We believe that the restaurant space is primed for semi-integrated solution. It takes the customers away from having the risky responsibility of having cardholder data and it is fast and easy to integrate to be ready for EMV.
