Although the deadline for the transition to restaurant EMV from swipe and sign payments was October 2015, there are many smaller restaurants and cafes that haven’t made the switch. For SMBs where fraud or data breaches is less of a concern, the switch to EMV has been less pressing. However, restaurant owners should be aware of what accepting and not accepting EMV can mean for you.
Simply put, the costs related to fraudulent transactions have shifted from the banks to restaurants, if the restaurants haven’t upgraded to EMV-ready technology. That means restaurants no longer have the credit card companies’ protections to fall back on—they’re are on the hook for losses related to fraudulent transactions.
What do you need to know about restaurant EMV if you haven’t made the switch yet? Here are four reasons to upgrade your payment technology
- Reduce Fraud: A technology upgrade can be costly for a small restaurant, but it’s worth it--since the liability shift in 2015, fraud is down 70%, according to Visa’s data. Although upgrading to EMV isn’t the law, the liability shift means that being a victim of credit card fraud will be a far more expensive lesson if you don’t have the proper terminals in place.
- Perks of having EMV: Although customers may have initially been confused by EMV (should I swipe or insert my card?) your customers have gotten the hang of it, and they appreciate the added sense of security. According to a survey conducted by NerdWallet, nearly 4 out of 5 Americans have positive feelings about EMV chip cards, while almost half of Americans believe that consumers benefit from EMV.
- The risk of not transitioning to EMV: If your restaurant is one of the few not properly processing chip cards, it could become a target--savvy thieves are seeking out businesses that aren’t using compliant terminals. If someone presents a stolen chip card to buy a $500 gift card or a dinner for a large crowd and your staff swipes the card through a non-compliant terminal, you’re responsible for the purchase. You are also liable if you swipe or key in a chip card at the terminal, so ask for another form of payment if the card isn’t working. Don’t give away free meals unintentionally--the best way to avoid restaurant EMV fraud is to upgrade your technology.
- Security: Restaurant EMV compliance gives you another layer of protection against fraud. Banks issued new chip credit cards in preparation for the shift, so if someone hands you a card with no chip, proceed with caution and because it may be counterfeit. You are only protected if you process an EMV chip card in an EMV-ready terminal. According to PayPal, by the end of 2018, 98% of cards issued in the US will be chip cards and according to NerdWallet’s survey, people want the extra protection. And it’s easy to see why—businesses make national headlines when they have a data breach because it opens their customers up to fraud. That’s enough to scare anyone into wanting a more secure checkout.
Restaurants that do not use a chip card terminal to process credit and debit card transactions can be held liable for fraud that occurs due to non-compliance. Diners want the added level of security that restaurant EMV payments provide for their own peace of mind, and it helps reduce fraud at your eatery too. Restaurant EMV compliance is easy to blow off as an added expense, but the result of non-compliance can be an expensive lesson to learn.
