EMV payment adoption has been slow and steady since the U.S. “flipped the switch” and began accepting chip card payments on October 1, 2015. The restaurant industry, however, continues to lag behind other merchants in upgrading to EMV.
EMV chip cards are designed to reduce the problem of payment card fraud. The EMV chip creates a unique, non-reusable code for each transaction, something a magnetic stripe card cannot do. Without that code, EMV transactions aren’t approved — unless the merchant doesn’t accept EMV payments and runs the card with the mag stripe. As of 10-1-15, those merchants with non-EMV-compliant systems, not payment card issuers, are held liable for those fraudulent transactions.
As the U.S. prepared for its migration to EMV, some merchants, especially restaurateurs, didn’t think payment card fraud at the point of sale (POS) would be an issue for their businesses. For some, time has proven otherwise. Even after experiencing the pain of chargebacks, some restaurants may still be reluctant to upgrade to EMV payments.
Here are some myths restaurateurs continue to believe and the reasons not to let them stand in your way:
1. The Myth of Customer Impatience
Some restaurateurs may be held back from upgrading to EMV payments by the belief that customers will be angry about increased transaction times with EMV. Although EMV transactions initially took a few seconds longer than a transaction with a mag stripe card, major card issuers have developed new quick-chip technology that has greatly reduced processing time. Few customers can even perceive a difference in transaction time now.
It’s also important to recognize that inserting a chip card is becoming habit for your customers. Moving forward, the question from customers will increasingly be, “Why don’t you have chip?”
2. The Question of Tipping
Another sticking point for restaurant owners has been concern that the EMV process will disrupt tipping. But as long as the POS system is configured properly for tip allowance, the usual tipping procedure doesn’t have to change. The server can dip the card and print a receipt to return to the cardholder, who can then add any desired tip along with their signature. For counter pay models, screen prompts ask if the customer wishes to enter a tip amount before the card dip and final authorization. The same applies for portable payment terminals at the table.
3. Fear of Upgrade Costs
The ability to accept EMV payments does require a technology upgrade, and restaurant owners may be worried about cost. This cost must be weighed, however, against potential chargebacks. It’s possible you could pay more for fraudulent charges you are liable for over time than the cost of the upgrade.
You can also view the upgrade as an opportunity to add new functionality to your POS to future-proof you system. For example, consider the rising technology of NFC (near field communications), which allows processing of mobile payments such as Apple Pay, Android Pay and Samsung Pay. Many EMV upgrade options give you this added functionality for little to no extra cost.
Don’t overlook the important fact that EMV offers protection not only for your business, but for your customers. Along with PCI compliance and solutions such as tokenization and encryption, EMV can help to secure your entire payments ecosystem. It also shows your customers you care about their payment card data safety and you’re using up-to-date technology — with minimal disruption to your current processes.
Once you get past the misconceptions and do a little research, you can see that upgrading to accept EMV payments is the smart choice.
