Merchant, do you sell in Europe coffee, other soft drinks, food or snacks in a vending machine with a card payment option (e.g. debit card, credit card, or contactless payment).

If yes, check if the payment terminal on the vending machine has a keypad for entering a PIN code or if a contactless payment is the only card payment option. If the keypad is missing and the contactless payment is the only card payment option, you should think of a new card payment solution to the vending machine.

If the vending machine's payment terminal does not have a keypad for entering the PIN code and you sell coffee, other soft drinks, food or snacks at the vending machine, it is, according to a new regulation (PSD2) primarily forbidden to accept chip payments without entering PIN code at the payment terminal, as the requirement of strong customer authentication (PSD2) is not met.

It is important to check this, because the fact is that not all payment terminals on vending machines on the market have a keypad for entering the PIN code, even though they indicate that chip card payments are possible.

If it is not possible to pay by vending machine (food or beverages) with a chip card payment in combination with a PIN code entry, the only option left for the merchant today is to accept contactless payments. However, if contactless payments is the only card payment option, the merchant will lose sales and the customer's payment experience will be degraded.

Merchants in vending machine business must be aware that nowadays (regulated in PSD2), the customer will have the option of only up to five (5) contactless payments in succession without entering a PIN code. The contactless payment restriction particularly affects vending machines where the use of contactless payment is popular.

To avoid losing card payment sales at the vending machine and to ensure a good payment experience for the customers, it would be more secure for merchants to choose a payment terminal for the vending machine, with chip payment and keypad-enabled PIN code entry as a standard. Such an option can be found from Seitatech.

New regulation (EU’s PSD2) changed card payments at vending machines starting from mid-September 2019. In practice, the most significant changes for merchants are restrictions to:

(1) Chip payment without a PIN code entry and 2) on the contactless payments.

We recommend that all merchants in vending machine business orientates to the recent European Banking Authority (EBA) answer of August 9th, 2019 to the question: ”Do transactions at vending machines without PIN pad require Strong Customer Authentication (SCA)?

The EBA's answer in summary is: Primarily, yes, if the exemptions do not apply (Article 11 or 12 of the EBA’s RTS). According to the EBA, selling food and beverages from a vending machine is not subject to exemptions.

If you, as a merchant, wish to receive card payments in a vending machine without interruption and without having the card issuer rejecting your card payments, Seitatech is the right partner for you.

Seitatech provides to merchants secure and reliable Castles UPT1000 payment terminals with payment methods that meets the requirements of PSD2 and strong customer authentication.

- Seita's team

More about the impact of PSD2 on card payments, please contact:

Kari Peltola
Legal, Compliance and Finance
Seita Technologies Oy

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