As credit card acceptance begins changing from magnetic stripe reading to chip-and-PIN transactions at retailers nationwide, a prominent e-government payment provider is advising government offices to wait before rolling out new systems. NIC Services says that government entities generally experience less fraudulent payments than the private sector, and that government merchants can sit on the sidelines unless particular agencies have experienced high rates of fraud or chargebacks. From Government Technology magazine on October 2:
...As for whether government should rush to make the switch, Mukesh Patel, president of NIC Services, told Government Technology in July that his company is recommending that its public-sector partners analyze their history of chargebacks and fraudulent transactions, and then make a business decision as to whether it’s beneficial to invest heavily in the terminals.
“Just from our experience, with the 28 to 30 states we work with, government services in general don’t tend to have a high fraudulence rate," he said, "because as a citizen you wouldn’t go to your DMV and renew your own driver’s license with a stolen card. It would be very easy to find out who you are.”
NIC’s recommendation is that unless an office encounters a high incidence of payment card fraud, they should wait to see what happens in the industry...
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