One of the simplest and most overlooked ways to improve your business is your credit card reader. Is it ready for EMV-chip cards? Despite a 2015 mandate, many small restaurants have been slow to implement this change due to concerns about the cost and complexity of switching their systems. Unfortunately, many are unaware of how much money they are losing through chargebacks. Ignoring this is a financial risk you can't continue to afford.
EMV, an acronym for Europay, MasterCard®, and Visa®, represents a pivotal shift in payment card transactions by incorporating a chip for enhanced security. In this post, we will delve into the importance of adopting EMV technology and the risks and financial repercussions faced by restaurants that fail to do so.
The financial pitfalls of Ignoring EMV:
The current payment ecosystem is fraught with risks, particularly for those still relying solely on traditional magnetic stripe cards. With EMV, the "dip and chip" process significantly reduces the vulnerability of transactions to fraud, ensuring a more secure payment environment. Businesses that haven't embraced this technology open themselves up to potential disputes and financial losses as guests can challenge charges, whether fraudulently or not.
Understanding the Financial Impact:
The absence of EMV technology leaves hospitality businesses exposed to substantial financial risks. Disputed charges, often related to fraudulent activities, can result in losses amounting to hundreds of thousands of dollars. It's not merely about protecting against fraud; it's about safeguarding the financial foundation of the restaurant and preserving its reputation with guests.
A Gateway to Improved Profits:
The implementation of EMV technology is not just a defensive move against fraud; it's a strategic investment in the restaurant's financial health. Restaurants that haven’t upgraded to EMV card readers integrated into a device like a server table tablet open their business to two types of restaurant chargebacks, both bank-initiated and customer-initiated. The average chargeback rate in the industry is 0.12%. Though this rate is less than other industries like travel at 0.89%, it does represent a true negative impact on the bottom line.
Important To Note:
Although industry standards encourage EMV compliance, there's no legal obligation for U.S. businesses to adopt it. As a business owner, the choice to accept EMV chip card payments is at your discretion. It's crucial to note that if you opt not to use this technology; you assume full liability for chargebacks associated with EMV payments. Additionally, any chip card swiped using a magstripe becomes instantly eligible for a chargeback.
By addressing the vulnerabilities in traditional payment systems by adopting EMV payments, businesses can reduce chargeback disputes and, consequently, enhance profits. The benefits extend beyond immediate financial gains too, by positively impacting customer trust and loyalty as added benefits.
POS Integration and Streamlining Security Measures:
Integrating EMV technology into Point of Sale (POS) systems is a critical step for restaurants looking to fortify their security measures while also saving on fees. The seamless interaction between payment terminals and chip-enabled cards dipped on a tabletop tablet ensures a secure and smooth transaction process, reducing the likelihood of fraudulent activities.
Embracing Mobile Wallet Technology:
In addition to EMV, the rise of mobile wallet technologies like Apple Pay and Google Pay brings an extra layer of security and convenience to restaurant transactions. These technologies not only facilitate swift and secure payments but also incorporate features like facial recognition, further minimizing the risk of fraudulent activities. And with most Gen Z guests primarily using mobile wallet tech to conveniently pay at the table, it becomes a necessity to offer mobile wallet pay options in your establishment to cater to their needs and provide a better guest experience.
Bottom Line- It's Time to Upgrade to EMV:
With advancements in technology and changing customer expectations, using EMV technology is now necessary for financial stability. By improving table-side payment processes, connecting with POS systems, and utilizing mobile wallet technologies, restaurants can safeguard against financial risks and enhance the guest experience. In an environment where security and convenience are crucial, EMV compliance paves the path for hospitality businesses to thrive.
Do you have a partner who can help guide you through the process of updating your restaurant payment technology to be EMV-enabled while integrating all your systems under one platform? If not, Ziosk is here for you. We are the contactless payment leader and have guided many of the top restaurant brands in the nation toward fully integrated solutions all within one platform. From setting up EMV-enabled payments to providing ease of ordering and upselling, Ziosk is the SaaS platform that works alongside your team to enhance guest satisfaction and boost your bottom line. Request a demo today at Connect with Sales | Ziosk .