Is EMV Technology a Fit for Your Restaurant?

It seems like every few weeks, there is a major data breach in a company, and credit card numbers are stolen. It happens quite regularly, even to small businesses who may be storing large amount of credit card numbers and transactions. As credit card companies begin to make a move to help protect their customers against credit card fraud, many restaurants are jumping aboard the fraud-proof train and beginning to accept EMV-chipped credit cards. Is EMV technology the right move for your restaurant?

EMV Chop Credit

EMV chip credit card technology was created to more effectively combat the problem of credit card fraud. EMV, which stands for Europay, MasterCard, Visa, is different than our current credit cards, as EMV cards contain an embedded microchip that will be used to authenticate the card during a transaction, right from the card reader. Once the reader determines the authenticity of the card, which should only take a few extra moments, the transaction can go through.

The technology that EMV credit cards carry is not necessarily new, but has previously been very expensive to produce, as well as build out systems needed for backend infrastructure. Two major electronic payment processor companies, First Data and Oberthur Technologies, who combined handle nearly 50% of all electronic payments in the US, have teamed up to produce the technology for country-wide use. The goal of EMV technology is to prevent thieves from being able to copy magstripe data to a counterfeit card, since EMV cards will require chip-authentication before releasing magstripe data to the POS terminal.

No major credit card companies will be requiring that vendors to accept their cards, but, beginning in October 2015, vendors will be held liable for any fraudulent transactions that occur through their POS systems. The system may seem similar to those who are familiar with Apple Pay technology, because EMV shares the same technologies. Some experts are predicting that the extra time it takes for a EMV card to be processed may push customers towards using Apple Pay for their purchases.

Jim Melvin, the CEO of AppSmyth, a e-commerce and mobile technology company, predicts that EMV may not fit in with the quick-serve restaurant industry. Of the 20 brands that he works with, none of them expressed interest in moving to EMV for security purposes. It’s important to note that three of the brands did convert to EMV to safeguard their business from paying out fraudulent charges. Melvin finds that fraud within the restaurant sector tends to be lower than that of the electronics or appliance sector, due to the lower cost of goods sold per transaction at a restaurant. One of the chains he works with does $1.3 billion in sales and has $2,000-3,000 annually in fraud. An EMV upgrade to all of the chains locations would run nearly $1,000,000.

Deciding on EMV Technology

Deciding whether EMV system upgrades are right for your restaurant comes down to a look within your books. If your business operates out of a single location that experiences a high yearly amount of fraud charges, protecting your business and your customers should take a high priority. Even if EMV technology is not a fit to your restaurant, looking further into data encryption, tokenization and additional security methods for diner’s transactions will ensure the safety of your customer’s data. Nothing can clear out a restaurant like a story on the local news about a data breach or credit card fraud, so be sure that you are your staff are properly trained to handle any situations that may arise, as well as are looking for future solutions to keep your customers at ease when they hand over their credit card after a meal.

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