Ingram Micro's Electronic Payment Bundle Anticipates Shift Of Fraud Liability

Ingram Micro Is rolling out several electronic payment services to make sure customers aren't walloped when the liability for credit-card fraud shifts in October.

The Santa Ana, Calif.-based distributor said its bundle of hardware and merchant services will allow solution providers across all verticals to take advantage of the $8 billion opportunity as chip and PIN EMV (EuroPay, MasterCard and Visa) technology crosses the pond from Europe to America, said Tim Ament, Ingram Micro's senior vice president and general manager of Advanced Solutions.

As of Oct. 15, end user businesses -- and not credit card issuers -- will be held responsible for any fraud that results from credit or debit transactions on systems that are not EMV-capable. The U.S. market is responsible for half of the world's credit-card fraud, with more than $5 billion lost in 2014, said Jeremiah Shea, a senior market development specialist in Ingram Micro's data capture/point-of-sale business unit.

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Although the change will mostly affect retailers, the new policies actually apply to all businesses that accept credit-card payments, such as hospitals, universities and municipal governments, Ament said. The sales opportunities are actually strongest around less obvious verticals because many customers in these spaces aren't even aware of the potential liability associated with their payment devices, he said.

Today, just 1 percent to 3 percent of cards, and 3 percent to 4 percent of terminals in the United States are EMV-compliant, which Shea said are some of the lowest rates in the world. Some 15 million terminals in the U.S. still need to be upgraded, he said.

"We're really behind in terms of this technology," Shea said.

New related services offered by Ingram Micro, Ament said, include network penetration testing; EMV testing and certification; payment processing and key injection, a tool that allows payment devices to read and verify the chip embedded in the new credit cards. The distributor had to build a separate "clean room" for carrying out the actual injections, said Greg Richey, director of professional services.

Existing services that will be offered as part of the electronic payment bundle include wireless network and infrastructure assessments, and integrated point-of-sale hardware and software, Ament said. Professional services offered as part of the bundle span the entire EMV compliance process from assessment and testing to certification audits and deployments to equipment disposal, Richey said.

Servicing EMV technology and the liability shift would be a natural progression for solution providers that already have point-of-sale practices, Ament and Richey said, as well as those that currently provide network security as payment card industry (PCI) and EMV compliance will be part of routine security audits.

Partners with customer needs and limited internal capabilities also can leverage Ingram Micro's electronic payment services to ensure their customers get into compliance. Ament said partners can take advantage of the entire offering or just use a handful of the services.

While other distributors, such as ScanSource, also have invested heavily in liability shift offerings, Ament and Richey said Ingram Micro has the most complete offering in the market because it services all end-user ecosystems (rather than only data capture and point-of-sale environments), and offers end-to-end solutions rather than just component parts.

Even though much of the work around achieving EMV proficiency is a one-time revenue boost for channel partners, Richey said PCI compliance certification renewals and penetration testing, which is recommended at least quarterly for all organizations, represent recurring revenue opportunities.

Although the liability shift for most point-of-sale terminals is this October, the change for pay-at-the-pump gas stations doesn't take place until October 2017, Ament said, meaning customers in the oil and gas verticals can count on another infusion of revenue in the years ahead.

Beltrane Web Services hasn't done any point-of-sale transactions to date, but owner Bryan Britt said the company's hometown of Conway, Ark., is filled with restaurants and mom-and-pop stores that will need to make the transition.

"I'm from Arkansas," Britt said. "We're not on the bleeding edge of anything."

Britt plans to put out a mailing to the retailers in town -- only one of which is a current customer -- so that he can capture a lot of the new business. And since Beltane Web Services has never before installed a credit-card terminal, Britt said he plans to leverage Ingram Micro for assistance.

PUBLISHED MAY 5, 2015