The State of EMV Compliance In Restaurants.
The fact of the matter is restaurants are the number 1 establishment plagued with credit card theft next to gas stations. Skimming of the magnetic stripe to extract the data needed to create counterfeit cards is fairly simple. Chip cards, however, utilize unique digital data to complete transactions that cannot be duplicated. But U.S. restaurants are the last to adopt the newer more secure payment technology. Some of the reasons restaurateurs have been hesitant to make the shift to EMV compliance are just not valid anymore as payment technology has evolved and many others were simply just perceived difficulties at the end of the day.
One of the more shocking myths surrounding EMV Chip credit cards was that the chip was not really very secure. The truth of the matter is the chip is significantly more secure than the mag stripe. Studies show that since worldwide implementation there are has been a significant decrease in global credit card fraud. EMV uses dynamic authentication which creates a unique code that is never the same twice making it nearly impossible for hackers to access the data. A more true statement is that the practice of using the “chip and signature” method common in the U.S. is not as secure as the “chip and PIN” method that has been adopted in Europe. But, still the chip card tokenization is significantly more secure than the old mag stripe cards.
Another myth surrounding EMV chip technology was that restaurants, whose employees largely rely on tips as a portion of their income, would not be able to adjust the payment to include a tip or that it would create too big of a disruption to current processes. There was a time where establishments who upgraded to EMV terminals found they cannot adjust the tip after the card was run, this was largely due to incorrect programming of the terminal by the provider, or incorrect programming at the POS system.
There is nothing in the EMV specifications that would not allow for “tip add-on”.
There is absolutely no reason for there to be a problem for one to add a tip when a customer pays with an EMV chip card, the problem has always existed within the programming.
The preferred method for restaurants would be what is referred to as “chip and signature” method. This method allows the establishment to operate, present checks and accept payments and tips as usual. The customer will notice little difference other than then comfort of knowing their personal data is better protected from prying eyes. This is generally the least expensive way to become EMV compliant. Terminals cost around $150 each.
There are actually many options for restaurant establishments depending on the type of service you are providing. For counter service it is simple to have your customer complete the transaction right there on the terminal or tablet adding a tip through a series of prompts prior to transaction completion. Mobile terminals equipped with a printer can be brought to the table where a printed receipt can be given to the customer to sign and add tip, or left at the table so the customer can add a tip and sign on the device with the comfort of not having the waitstaff standing over them and waiting. Dining establishments that prefer to bring the payment to a central station will have EMV compliant terminals where staff can still print a receipt with a tip adjustment line to present at the table for signature.
The current POS system could be the weak link. This biggest problem with upgrading to a new POS system is that POS providers want to charge customers for new hardware. Newer cloud based POS systems utilize technology where third parties do not have access to un-encrypted cardholder data but older models were not equipped with this type of secure technology. Older models stored cardholder data. Many restaurants operating on older server based POS systems have been informed that they would have to spend tens of thousands of dollars to upgrade the system to one that could communicate the dynamic authentication that comes with EMV technology. This is one of the unfortunate things about hardware/server based systems. Restaurateurs who already operate on tight margins couldn’t imagine how they would foot this bill. A better option would be to go with a cloud based system where free software updates are included.
Considering that the continuous move towards safer transactions will ultimately include a shift to “chip and pin” transactions in keeping up with the rest of the world, if it is time to upgrade your system it would behoove you to do so with the system that is most pliable for future changes in payment technology, and that most likely means getting rid of that old clunky server based system that requires tens of thousands of dollars of hardware upgrades and software programming for an advanced, feature rich, EMV compliant cloud based POS that is not only affordable but capable of growing with and molding to your changing business needs.
Of course, there are always to work-arounds. For instance, one way would be for a business owner to purchase an EMV compliant terminal that runs alongside the POS system to process payment transactions and then the server would go into the POS separately and close the check. But maybe it is time to think about an upgraded POS to a cloud based system that will be able to grow with your business as well as update to the new and changing technologies affordably.
Besides that most new cloud based POS systems are already integrated with EMV compliance so you won’t have to upgrade your terminals and also buy new POS software.
The U.S. is dead last in accepting EMV chip technology behind countries who are experiencing as much as 75% decrease in card present fraud. While reports show that the U.S. has replaced nearly 90 percent of credit cards with EMV chip cards, only about 60% of all establishments have upgraded to EMV capable terminals with restaurants being the smallest portion according to payments consulting group Auriemma.
Having EMV chip compliant terminals actually protects the merchant by shifting the liability back to the card issuer if there were to be a fraudulent charge. However, if a customer comes in with a chip card and the restaurant does not have a chip terminal and has to swipe the card and it ends up being a fraudulent charge than the liability will fall on the establishment.
You can do your part to help lower credit card fraud across the board while also protecting your own business. Bankcard Brokers can help you find the most appropriate solution for your business to become EMV capable. Bankcard Brokers chooses to sell our equipment at cost, we don’t mark it up just to make our cut, so if you are thinking it is time to upgrade to the newest cutting edge software for your business don’t hesitate to turn to our ETA Certified Payments Professionals for advice. The goal is to get you up and running, completely compliant with all PCI, EMV as well as other required security measures so you can process payments the safest way possible. Give us a call today and experience the “Bankcard Brokers Difference.”