The Real Scoop: Impact of EMV on Restaurant Operations

By : Andy Sirmon

September 08, 2015 03:27 PM

EMV is coming on October 1st…but what does that mean? What do you have to do to get ready? How does it impact your restaurant? You may have read about the new chip card technology, the payment terminal devices that process the cards, or the liability shift that occurs on October 1st…but what you may not have heard much about is how EMV can significantly impact traditional operational payment flows – especially for restaurants.


As a leader in consumer transaction technologies, we want to give you the information you need in order to make the right decisions for how you’ll implement EMV in your restaurant. In this post, we’ll cover the basics around EMV and help you understand the big picture in regards to how your operations will be impacted. In later blog posts in this series, we’ll go into more detail on specific impacts that EMV causes and ways to address them in your restaurant.


The basics on EMV


First of all, it’s important to understand what EMV is and what it isn’t. EMV, which stands for EuroPay, MasterCard and Visa, is a set of standards and guidelines regarding smart chip technology, which is what differentiates EMV-compliant cards from the standard magnetic stripe cards that we’re all used to.


As part of the transition to these EMV standards, new credit cards are being issued to consumers that replace their older magnetic stripe cards. These new credit cards come with a secure microprocessor chip built in, which generates a unique number for each sales transaction in a restaurant and verifies a credit card is authentic at the time of a purchase. This makes it virtually impossible to use a fraudulent card on a card-present transaction.


The October 1st liability shift is not a mandate or a requirement. It is a shift in responsibility for what entity pays for charges made using a fraudulent card within your restaurant. In order to influence businesses to adopt the EMV technology standard and help prevent continued fraudulent credit card activity, all the major credit card brands are aligned on shifting counterfeit fraud liability to the business, payment processor or issuing bank that is the least EMV-compliant as of Oct 1, 2015. EMV is a risk decision for a business, not a regulatory one.


If you choose to implement EMV in your business, you will need to install a new kind of terminal device that accepts chip credit cards for payment. You might think it’s as easy as plugging in that new terminal to your point-of-sale and immediately begin taking payments, right?


Well…not quite.


What you need to know


It’s important to understand that the way people have always paid has been significantly different in a restaurant than in other businesses, like retail stores. In retail, speed-of-service is important, but it does not carry the same expectation and sense of urgency as in restaurants. In fast-food and fast-casual restaurants, lightning-fast speed-of-service is an expectation of consumers. Table-service operators also look to constantly improve their table turns, even in a more relaxed environment.

Restaurant operators also aim to tailor the payment experience to the convenience of the customer. This is why drive-thru services exist and why service staff have traditionally processed the payment away from the table, so as to impose as little as possible upon the guest.

But in an EMV world, the way your guests pay will change…and you may feel it.


The operational impacts of EMV


How so? There are two standards of EMV acceptance which will have the greatest impact to your restaurant:


  • Customer-Present Payment Flow: EMV standards call for chip-enabled cards to remain in the control and sight of the cardholder at all times. What this means is that guests with chip cards will need to conduct the payment process themselves; your staff won’t be able to take a chip card from a customer and then process the transaction out of their sight.
  • The Chip Authentication Process: New chip cards come with a secure microprocessor chip built in, which generates a unique number for each sales transaction in a restaurant and verifies a credit card is authentic at the time of a purchase. In order for this authentication to take place, guests will need to insert, or “dip”, their new chip cards into the new terminal devices at the time of payment. Here’s the kicker: the card will need to stay in the payment terminal for the duration of the transaction, which can be up to 20 seconds – an eternity when you are waiting in line at the cashier.


These two EMV standards will have a profound impact on a lot of the ways in which your restaurant operates. So in the next few weeks we’ll dig a little deeper and explore many of the scenarios that these EMV standards – the customer-present payment flow and the authentication process – will impact. In addition to covering that in this blog series, we’ll also discuss ways in which you can perhaps lessen or mitigate many of these impacts – both through staff and server training, as well as through other, more innovative, payment capabilities.


Next time…


In our next blog, we’ll talk about how EMV impacts some of your greatest competitive differentiators – your guest experience and your speed-of-service.




Andy Sirmon

NCR Hospitality

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Andy is a passionate marketer dedicated to helping make every day easier for restaurant operators. Here, Andy shares his insights on the restaurant industry and how disruptive innovation is transforming the way restaurants do business.