Hospitality Industry? Don’t Be Caught Napping About EMV

Ingenico Chip PIN device 2

With EMV Chip and PIN compliance becoming mandatory in the US from October, TISSL’s Stuart Coetzee describes the new payment security standards and advises hospitality operators not to be caught napping.

In matters technical and financial, we’re used to the United States leading the world. In the field of credit card payments, however, the world’s largest economy is a huge laggard rather than an early adopter. The EMV Chip and PIN payments standards that the US is to adopt later this year have, for example, been in place in the UK for 10 years. The security and convenience offered by EMV versus magnetic stripe cards is immense; their introduction resulted in a 30% reduction in UK card fraud.

Globally, 29.74% of card-present transactions meet the EMV standard. In Western Europe and other first world countries, the percentage is as high as 96.33%; it is as low as 0.03% in the US. But the nationwide shift to EMV is now well underway. Approximately 120 million Americans have already received an EMV chip card and that number is projected to reach nearly 600 million by the end of 2015.

The payments landscape is undoubtedly a complex one and EMV is just a small part of the total ecosystem. Whilst the scale of the retail industry represents the greater challenge in terms of volume of transactions processed, hospitality operators are affected by the new standards just as much as retailers. They, too, need to sit up and take notice of the following elements:

EMV liability shift – Part and parcel of the US’ switch to EMV Chip and PIN cards is the liability move to the least secure point in the case of compromise or fraud; this is often the merchant/the point-of-purchase;

PCI standards adherence – Hospitality operators will need to demonstrate adherence to PCI standards. These standards aim to reduce security compromises and card fraud by ensuring that card data is adequately protected both in ‘card-present’ and ‘card-not-present’ scenarios;

Tokenization and P2PE – Tokenization is a means of ensuring that credit card data is securely stored as a token rather than a number, whereas point-to-point encryption is about encrypting customer credit card data as it enters the system;

NFC payments – Standing for “Near Field Communication”, NFC is where you can tap and pay with the credit card, much as the Apple wallet works on the iPhone 6. The difference with an NFC-enabled card is that it gives the security of a PIN transaction with the speed of a credit card transaction.

Mobile payments – Customers are increasingly demanding mobile payment via smart devices, necessitating the integration of gift cards and loyalty programmes. In some cases, this will require an overhaul of the technology used at point-of-service.

Hospitality operators need to review and secure all points of entry for card data. This includes online food ordering and accommodation reservation, as well as face-to-face payment of checks. Not only is this good practice to reduce fraud but it also limits the scope of any PCI audit and potential exposure to financial penalty, saving operators cost, resources and brand damage.

A new POS solution

Having read this far, many hospitality operators will have become concerned about the cost and complexity of adopting these new standards. The good news is that there is an approach that can reduce both cost and complexity. 2015 may be the year to review your POS provision; new integrated POS solutions already support the above standards and can ensure the business is compliant and ready to go in a painless and efficient manner.

Some systems may need just a simple upgrade to add a PIN pad and create an integrated system that can deliver centralised data capture. The solution available from your current POS supplier may not be leading-edge or have the flexibility to be upgraded, and may require replacement. The easiest route to compliance may be a new POS platform with longevity, which can support Chip and PIN as TISSL has been doing for the 10 years it has been mandatory in the UK.

The benefits of integrated Chip and PIN

Integrated Chip and PIN systems are easy to adopt, learn and fast to use. An integrated system with centralised data entry at POS makes for a slicker transaction as the final step in the dining transaction. They reduce server trips to the waiting station, freeing up time for increased customer interaction. These systems also speed up payment transaction times, which means tables can be turned faster and queues kept low; this reduction of time can have a direct bottom-line impact.

When it comes to paying, checks can be automatically called from the terminal onto the Chip and PIN device. This removes keying errors on the part of servers and speeds up the entire process. Features such as partial payments and split bills are supported through Chip and PIN integration. Most importantly, you can also ask for a tip from the device!

Chip and PIN transactions are more secure; not only do they require a PIN known only to the card holder but – as described above – the Chip card contains encrypted information which cannot be skimmed in the same way that magnetic data can be copied. Aside from greater security and fraud reduction, Chip and PIN makes it easier to offer self-check-out (at a kiosk for example) in take-out or fast-casual venues. It makes for an easier process for the operator than swiping cards, printing and signing counterfoils and having to scrutinise signatures for possible mis-match – and of course cashing up is faster too.

Supporting Mobile Payments & Loyalty

The arrival of the new standards regime provides an ideal opportunity for hospitality operators to not only evaluate their current POS provision, but also to make the move to supporting mobile devices for ordering, payments, gift card integration and loyalty programs. Smartphone and tablet solutions are proven to please customers, uplift sales and boost efficiency. New POS solutions now exist that encompass transaction processing from fixed-point terminals and from mobile devices, as well as integrate smart methods of generating increased business through customer loyalty management. Best of all, these new POS solutions support EMV Chip and PIN, NFC, Tokenization and P2PE, and ensure operations are PCI:DSS compliant. Job done!

 

Other articles about the hospitality industry:

Innovations and aspirations found at National Restaurant Show
5 Lessons to Learn from a Restaurant POS Security Breach
POS Re-sellers With A Flair For Hospitality
Mobile Payment Technology Reduces Order Time and Increases Sales for Busy Gastropub
EMV And The Hospitality Industry – a developers perspective
Four Top Technologies to Activate Your Restaurant Business

 

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Editorial Team

PointOfSale.com is a leading industry news site for the point of sale and payments industry.We are also the go-to resource for small business owners that want expert tips and inspiration on how to run a successful business. Collectively, our team of experts has decades of POS, payments, and small business experience.