On October 1, 2015, the EMV liability shift goes into effect – but what does that mean for restaurants, and how can you prepare? In order to best position your restaurant for the onset of the new EMV technology and any regulations that come with it, consider the answers to the following questions:
What operational aspects of my business will EMV affect?
Due to the secure nature of EMV payment processing, some aspects of the current point of sale payment capabilities will be affected:
• EMV payment processing can take up to (30) seconds to process an EMV transaction. The credit card must be left in the EMV terminal during the entire transaction. If the card is removed during payment processing, the process must be repeated from the beginning.
• Tips must be entered upon processing payment. The user will not be able to enter a tip once the credit card has left the EMV terminal.
• Each EMV terminal holds its own, separate batch. Each batch must be reconciled and settled separately.
• EMV compliance does not eliminate the necessity for PCI compliance
• No offline mode. Dial backup is available, but requires an active phone line for each EMV processing device.
• No Pre-authorization of payments
• No payment adjust or reapply
• No split credit card batches
What do I need to do to become EMV compliant?
Please contact us directly in order to obtain a specific proposal for EMV implementation for your business. EMV implementation with Focus POS will require the following hardware and software changes:
• Focus Version Upgrade – FREE
• Focus Direct EMV Credit Module Upgrade
• EMV credit card terminal at each POS terminal that will accept payments
• Separate network cabling run to each EMV processing device
• Possible upgrade to larger network switch (Necessary if current network switch does not have enough network ports available to support EMV devices)
What is EMV?
EMV is short for Europay, MasterCard, and Visa, the three companies who originally teamed up to create a more secure method for completing credit card transactions. The intention is to set a worldwide standard for credit card security that greatly prevents fraud.
The EMV standard utilizes smart card technology, in which the cards store information on integrated circuits (known as a chip) rather than magnetic stripes, though magnetic stripes are sometimes included to allow for backwards compatibility. During a transaction, EMV chip cards transmit information through unique cryptograms. Since the credit card number isn’t directly being used, the only information thieves can typically access is useless after the transaction is complete. For added protection, some EMV transactions require a PIN or signature to be used in tandem with the card. All of these factors combine to greatly reduce fraud in instances where EMV is being used.
Do I have to implement EMV at my restaurant?
No, EMV is not a requirement for businesses. When making the decision whether or not to implement EMV, ask yourself these questions:
• What is the total cost of EMV implementation?
• Will EMV negatively impact the efficiency of the ordering process?
• Considering my current fraud chargeback liability, will the impact of the liability shift be large enough for EMV to make sense? (An average restaurant has less than $200/year in chargebacks)
• Will customers trust my restaurant less if I don’t have an EMV-compliant system?
• What is the current state of my point of sale system’s security?
• Are there any other security options I should be considering instead?
What is the extent of the liability shift?
The liability shift, which will occur at the beginning of October 2015, will, in certain situations, impact who is responsible for handling fraudulent transactions. For example, think of a situation where a customer uses an EMV card to pay for their order at your restaurant. If that transaction is fraudulent and you are not in compliance with the EMV standards, you would be held liable for the fraud instead of the card issuer. If your restaurant was EMV compliant in this situation, the card issuer would be liable for fraud.
Why is the EMV liability shift happening now?
EMV has already been adopted in much of Europe, Canada, and other parts of the world, so the U.S. is behind on this security trend. In fact, card present fraud in the United States is above the world’s average and has been increasing in recent years. The fact remains that EMV has been around for quite a while, and refusing to adapt to newer and safer technologies can spell disaster for businesses. This liability shift is long overdue, so there is a push to bring America up to the world’s newest credit card security standard.
How does EMV work at the point of sale?
EMV transactions take place in four basic steps:
1. An EMV card must first be inserted into a reader connected to your restaurant’s POS system.
2. The reader communicates with the chip in the customer’s card to gain access to the card’s unique cryptogram/key.
3. The unique cryptogram is sent to the processor’s host with approval for the transaction.
4. Once the transaction is complete, the EMV card can be removed from the reader.
Some EMV transactions require an additional step in which a PIN or signature is used to further prevent fraud.
Will my current equipment work with EMV cards after the liability shift takes place? Will credit cards still be issued with magnetic stripes?
EMV cards will still be issued with mag stripes, and there is no plan currently in place to stop using them. However, it is hard to say with complete certainty how long they will be relevant if better technologies continue to be developed. EMV has been around in Canada for over five years, and credit cards are still being issued with magnetic stripes.
It’s extremely unlikely that credit card issuers would eliminate mag stripes without an extensive notice, so there should be nothing to worry about in that regard. Your POS equipment will still work after the liability shift – even with EMV cards.
Does my credit processor have an EMV certification with Focus POS?
The EMV certification procedure for software developers and credit card processors is a time-consuming process for all parties involved. The certification roadmap for EMV integration with Focus POS in regards to specific processors is as follows:
• Sterling Payments—Currently Available for Deployment
