How the Microchip Shortage Affects Credit Card Payments
Alison Arthur ● November 3, 2021 ● 2 min read
Headlines about the semiconductor chip shortage are hard to ignore. The imbalance of supply and demand is impacting all aspects of consumers’ lives, from the availability of electronics to the production of automobiles. And credit card payments are no exception. There are two major ways the chip shortage is affecting credit card payments: 1) a limited supply of credit card readers; and 2) reduced issuance of chip-enabled payment cards. Let’s explore these two issues and how businesses can help reduce their negative impact.
1. Credit card readers are hard to find.
Businesses need credit card terminals to accept card payments, but electronic card readers rely on microchips to process transactions. And businesses that are seeking new or replacement devices are experiencing the same backlogs affecting other parts of the market. Add to this global shipping and transport challenges, and some terminals manufacturers are operating on a delay of up to six months for new payment card readers.
What can businesses do about it? First and foremost, take stock of current equipment and determine if devices need to be upgraded soon. Last-minute orders will be challenging, so anticipating the need for new readers and placing an order as soon as possible can help businesses avoid situations where new devices are required but not available.
In addition, ask your payments provider if they have ample equipment in stock for emergency replacements. If your current partner isn’t well prepared, consider contacting other payment providers to discuss their approach to managing inventory. As businesses continue to recover from the impact of the pandemic, it’s mission critical to avoid unnecessary operational disruptions like inoperable payment card readers.
2. Chip card issuance is being disrupted as well.
Since the 2015 liability shift, chip cards have become ubiquitous. But chip cards rely on an abundant supply of semiconductor chips as well. With the limited supply of chips available, payment card issuance is being hampered. This means that there are less cards available to issue to new customers or reissue in the event of a lost, stolen, or expired cards.
What can businesses do about it? Start by evaluating if your current credit card readers can accept payments via near field communication (NFC). Leveraging this technology allows businesses to accept payments via digital wallets including Apple Pay, Samsung Pay, and Google Pay at the point of sale. Consumers are likely to have their phones on them to make payments, thereby eliminating the need for physical cards. This is especially helpful in the event that a payment card reaches its expiration date and a physical card can’t be reissued. The account information can be updated in a digital wallet app and used for in-person payments instead.
If your business is struggling with these issues, get in touch with Paystri. We have the inventory and solutions your business needs to keep payments humming.