(Photo Credit: ibusiness lines)

Have you ever had to enter a pin for your chip enabled credit or debit card instead of just signing the receipt? The answer may vary depending on where you live, but in the U.S., the answer is yes 40% of the time. The technology behind the pin and chip system is called EMV (Europay, Mastercard, Visa) which is a technical standard that has already been widely accepted by most European countries and Canada. The payment terminals usually accept cards with chips rather than magnetic stripes and require a 4 or 6 digit PIN rather than a signature. In 2014, the percentage of EMV enabled devices only reached 27%.

This immense growth is quite lucrative for payment terminal providers such as VeriFone (PAY). These numbers confirm a large revenue opportunity for VeriFone, it also points to the fact that there is plenty of room for future growth. Not only so, but merchants using non-EMV compliant terminals will start assuming liability for fraudulent transactions starting in October of this year, a liability previously covered by the credit card companies. VeriFone CEO, Paul Galant, pointed out that none of the 1 million gas stations in the US have EMV capable devices and that this trend should change soon, providing VeriFone with steady revenue momentum. 

Aside from EMV, a newer technology called NFC (Near field Communication) is another protocol that allows electronic devices to exchange radio communication with each other by touching the devices together or bringing them in close proximity. This is the technology that allows your tech-savvy friend to pay for his groceries at Whole Foods with his Apple Watch or iPhone 6. Apple (AAPL) Pay has been the initiative to really push NFC technology into the field but more recently, Google’s (GOOG) Android platform announced that seven out of ten phones with Android platforms are now ready for Android Pay. With Android representing approximately 80% of the worldwide cellphone market, we are expecting to see more merchants across the world to upgrade to NFC terminals.