Using Chip-And-PIN Technology In The Food Service Industry
Have you noticed that your customers are becoming confused when they see your antiquated terminal? Do they comically attempt to jab their card into your terminal instead of swiping? No, these are not aliens who are unused to our peculiar ways—they’re customers with a new, ultra secure chip credit card, and they want to use it.
According to Trustwave’s annual security report, in 2015, the food and beverage industry was the second largest industry to be compromised by data breaches. Admittedly, that’s 13% of data breaches compared to retail’s 43%, so the industry isn’t doing too bad. But here’s the kicker: 95% of those security breaches were related to POS systems.
If you’re in the food and beverage industry, perhaps now is a good time to look into upgrading…
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Tell Me About this EMV Thing.
I’ll let our comprehensive guide do most of the talking, but here’s the deal: chip cards are more secure than traditional magstripes because the data used to authenticate the card is dynamic instead of static. It is still possible for fraudsters to get a look at the numbers used during the transaction, but because those numbers are only one-use, they aren’t going to be of any value. This feature, and the (theoretical) impossibility of replicating the chip card, makes most customer-verification fraud very difficult… unless you don’t have a terminal capable of reading those chips.
As I’m sure you know, chip cards still come with magstripes. If you don’t have an EMV terminal, you can still swipe the magstripe. Unfortunately, fraudsters can easily get access to that data, make a new card, and use it at your store. Nobody wants to deal with that anymore, which is why as of October 1st, you are liable for any fraudulent charges that could have been avoided if you had upgraded.
The choice is yours. You do not have to upgrade. Just keep in mind that no new terminal means no new security.
I Don’t Swipe Cards. Do I Have to Upgrade?
Nope! EMV only applies when the card is present and interacts with your terminal. If you key in entries, take orders over the phone, or sell your product online, carry on. However, considering that about 99% of food and beverage sales happen in-person, I’m guessing you swipe cards.
How Will Upgrading Affect my Business?
EMV technology will affect your business in a few small (but noticeable) ways at first. Obviously, the most pertinent problem is that you’ll have to shill out the money to get new terminals. Yes, they are going to cost more money than your old terminal. No, they aren’t going to cost that much more. You’re probably looking at somewhere between $30-$200 per terminal (much less money than if you get hit with the liability for fraudulent charges).
Check out our FAQ for more information about choosing a good terminal and where to get them. Before you do, if you process a large volume of orders or accept tips, read on to learn about specific terminal functions you will want to look into.
Slow transaction rates: You might also have difficulties due to the slower transaction rate that comes with dipping cards. Chip cards are not as simple as swiping and signing—the customer has to insert the card into the terminal, sign or enter a PIN, and then the card spends a few moments talking to the terminal before the transaction is authorized.
If you process a high volume of orders, and the slower times would be a problem for your business, I would recommend looking into the much-faster NFC technology as soon as possible. Many EMV terminals are NFC enabled, but they’ll cost a bit more. For the customers who don’t have NFC, train your employees how to work an EMV terminal so the transactions will go as fast as possible.
Tipping: EMV cards don’t allow you to adjust for tips after the transaction has closed. Other than that, the technology is so new that nobody quite knows how tipping is going to go down. Very frustrating, I know—both for employees who want to give customers their privacy, and customers who want to be discreet about tipping. If your business accepts tips, you have a couple of different options when it comes to choosing the ideal EMV terminal:
If customers pay at a counter, like in a coffee shop, you can have a terminal with a customer-facing pin pad so customers can enter a tip. Similarly, if you use a tablet, you can start the transaction, then turn the pad around to face the customer, or hand it them, so they can enter a tip before signing.
If guests pay at a table, like at a restaurant, I would recommend getting a hand-held WiFi terminal. With these, the waiter can start the transaction, and then hand it to the customer to add a tip and sign/input their PIN. Depending upon the card issuer, you might be able to tell your waiters to take the card, process it, and leave the transaction open. The waiter will then bring a receipt to the customer, who writes down a tip and signs, and the waiter adds the tip before closing the transaction. However, the card issuers are so diverse on this topic that I would suggest that you tread carefully if you’re going down that route.
So, If I get EMV Terminals, I Don’t Have to Worry About Security?
Goodness, no. You always have to worry about security. Chip cards and terminals combat certain types of (very prevalent) fraud, but they will not do anything to stop security breaches. EMV technology only works in conjunction with other forms of security. The majority of POS system breaches, according to the Trustwave 2015 report, are due to poor passwords (50%) or other gaps in merchant’s remote access or VPN software (44%). Once fraudsters get in, they can steal a whole lot of information if it’s not protected, or they can install malware in your software to gather information.
While you’re upgrading, you might want to invest a bit of time into changing your passwords, enabling network-level authentication, restricting access to only those who need it, and updating to the latest version of all your software.
The Bottom Line
Changes always cause ripple effects, and the EMV transition is no different. While it may affect your business in a few small ways, rest easy knowing that your business is not the only one going through these changes. Once customers and businesses get used to EMV, merchants who haven’t upgraded yet will be the odd ones.
We understand how difficult all this business software can be, which is why we’re here to help. Questions? Concerns? Leave them in the comments or contact us directly.