Web Exclusive | January 2013 | By Kevin Hardy

Are You Ready for EMV?

New credit card standards will have major effect on industry starting in 2015.

EMV credit card standards will affect quick-service operators starting in 2015.
image used with permission.

Though 2013 has just begun, restaurant operators should keep at least one eye on 2015, when new credit card standards will begin to reshape how most customers pay for goods and services.

By October 2015, all restaurants and other merchants will be subjected to new Europay, Mastercard, and Visa (EMV) standards, which reflect a shift from magnetic-stripe credit cards to chip-and-pin cards. Considered safer and widely used across Europe and other nations, the chip-based cards require insertion of the card into a terminal throughout the entire transaction.

“That’s going to be a change in behavior that restaurants and retailers are going to have to adapt to, as well as consumers,” says Mike English, executive director of product development for Heartland Payment Systems, which processes about one in seven restaurant industry transactions.

EMV compliance is required for credit card acquirers and processors, though it’s not mandated for merchants and processors. But merchants who don’t meet compliance by October 2015 will assume liability for fraudulent purchases—a shift that is poised to drive many to adopt the new standards and avoid the risk.

“The U.S. is the last bastion of the magnetic stripe. Every other country and every other continent, with the exception of Antarctica, has moved over to EMV.”

English says the change does come with a share of good news for operators. First, the chip-based cards are less susceptible to fraud. U.S. adoption will also allow for increased interoperability between domestic and international markets as things move to a more global credit card standard.

“The U.S. is the last bastion of the [magnetic] stripe,” English says. “Every other country and every other continent, with the exception of Antarctica, has moved over to EMV.”

The shift means restaurants across the country will have to review their point-of-sale systems, including in-store hardware and software. The transition could prove easier for small operations, which may be able to move to EMV by simply adding a new external pin pad. But the larger quick-serve chains will likely have to invest heavily as they look to upgrade thousands of terminals and systems.

And while the change is still a ways off, experts say the move could influence operators’ purchase of POS equipment; some may want to delay purchases planned for the next couple of years, while others will speed up their upgrades to obtain EMV compliance by the 2015 deadline.

For Dallas-based Wingstop, the shift to EMV will likely be handled through installing add-on devices to existing POS terminals, says vice president of technology Jason McEachern. He expects the transition will be easier for Wingstop than some other brands because the 550-unit chain typically has only two or three terminals in each store.

McEachern says operators should be prepared to invest time and energy to meet new standards.

“It’s going to be different,” he says. “And there is going to be an expense. Even if you have compliant devices, at some point in the future you’re still going to have some legacy elements you’re going to deal with.”

But the new EMV standards shouldn’t detract from a restaurant’s commitment to PCI compliance, says Bob Russo, general manager of the PCI Security Standards Council, a nonprofit that establishes standards for all organizations that store, process, or transmit credit card data. In fact, Russo says, EMV and PCI standards are best used together, as merchants do in many European countries that meet both standards.

“Even in the very mature [EMV] markets, people are realizing that EMV alone, while a good fraud tool in the face-to-face environment, is not really enough to protect everything,” he says. “We don’t see any downgrading of PCI at all.”

While operators may lament the costs associated with meeting another set of standards, Russo says, the upgrades will save operators heartache and cash in the long run through improved data security.

Russo expects to see larger merchants add EMV terminals this year as credit card companies begin to issue more chip-based cards. Then it will take time—some estimate as many as seven to 10 years—for chip-based cards to become fully integrated into the marketplace.

“You’re probably looking at two to three years before you begin to see it really becoming ubiquitous out there,” Russo says. “It’s a rather slow conversion over to EMV. But it’s definitely coming.”


Within just a few short months merchants will be subject to huge fines for non-compliance...work with a company that is reputable and has seasoned professional agents that know the industry well to provide excellent service.....capitalbankcardwpb.com our Merchants are our #1 priority as well as your bottom line profits!

I am giving free machines to anyone that does over $10k a month in processing.  Free EMV machines that work now.  There are a lot of EMV machines in the market that aren't working yet.  All the processors don't have the man power to certify each kind of machine out there.  Most of them start with the most popular machines.  If interested, please call or text me 214-477-5623.Thank you,

Not true. No fines for not being EMV compliant. The merchant will be responsible for the fraudulent transaction, but there is no fine associated with it.

We only take cash.....good luck with that :)

Your missing a lot of sales by not accepting credit cards. The people who come to you for your services only come with a certain amount of cash in their pockets even if they want something else they can't buy it because you don't accept credit cards. You should cater to your customers needs by accepting credit cards. Making them pay bank fees at random ATM's isn't serving your customers better and it's an inconvenience who many people don't want to deal with. Sounds like you should speak to someone honest who can set you up to accept credit cards and get with the 20th century.

you mean the 21st...

Actually, in reality countertop terminals such as the early verifone Zon though not very sophisticated were introduced to the public marketplace in the early 1980s, thus making the statement to join the 20th century completely true, it never ceases to amaze me how businesses think accepting credit cards will hurt their bottom line? Now if you are in business just to be in business but not profit... then bless your heart and truly, good luck with that!

yes, we heard about this coming and its crazy. but you have to comply. we got our terminal from chris muzzy over at payment alliance international. he gave us a wonderful deal on it, and was really understanding and helped us out so much.

This will be interesting as we move closer to October. I help small to medium-sized businesses with free technology and lower rates than what they are paying now and upgrading to EMV. A lot of other businesses may be charging rising rates for this equipment, especially as we get closer to October 2015. So, I would highly suggest businesses to start doing this now rather than be in the scramble in a few months from now or even around October when demand is super high so prices could be anywhere, re: what Josh and Moua are saying.....

We take a lot of credit cards via phone. Workshop reservations, donations, gala ticket sales, etc. Is the only solution to require people to buy online or come in to buy?

End-to-end encryption is the answer for these transactions over the phone or online. This has also been standard overseas for many years. In America we have regulations to encrypt medical data etc. and the rest of the world also encrypts payment data.

I have been in the merchant services field for ten years. Primarily working with the big players. Most people will give you advice that is intended primarily to benefit them (the advice givers). All you have to do is take the time to educate yourself on what affects you. I think that it is well worth it to spend just a few hours to learn what you are paying and why. Then you can shop around, it is generally best to use big processors even if you go through a reseller. Some of the big ones are Global, TYSYS, NPC (National Processing Company - out of Kentucky). Some advice: It is never good for you to get 'free equipment' you will pay through the nose fro 'free' - think 'free' cell phones. You can always buy used equipment. It is as trustworthy as new. Just make sure that it is not 'locked' or proprietary. You will not be able to use it unless you use it with the processor that is locked to. You cannot go wrong with Verifone equipment. So again, understand the issues and the industry (only to the extent that it affects you, like in pricing, security and customer service - from whoever you choose to process with). I will be happy to educate you and guide you. I will not even mention the company I represent much less try to get you to sign up with me. Also remember that absolutely EVERYBODY has the best or lowest rates and 99% of the time anybody can beat anybody on price. Lastly, you have to keep your eye on your statement and check it at least six months for price increases. Almost all of the time if you ask to have your rate reduced because otherwise you will leave the processor they will lower it. Remember that in most cases the new processor you choose will pay your cancellation fee with your current processor (in case that would be the only reason why you wouldn't leave your current processor). Many processors will give you a low rate but will raise it, usually without your knowledge, it's in the contract. This industry is not regulated as well as it should be. Ed Gomez [email protected]

Total bull for a restaurant owner because you can not enter a tip after the card is swiped! So you have to have your customers pay up front.

This is not true. Look at the process is European restaurants even up the road in Canada. We are so far behind down here. The customer chooses their tip at the point-of-sale and the card never leaves their site. America is the credit card breach capital of the world for a reason.

How will this effect transactions where the card information is given over the phone or through the internet for services rendered or purchases?

the card itself with the chip on it along with the card info such as cvv will be compliant enough as the compliant processor wont process the generic cards. - former Relationship Manager - BarclaycardUS

I have a seasonal business and work alone. I currently use a PayPal slide card reader and only have about 5% of my approximately 100 clients that use plastic, most opt for cash. They know their fees, or a fairly close ball park estimate before they come in to have their taxes done. Will I be required to upgrade to the newer system?

We have a new credit card company that are far more customer friendly and purchased a terminal from them however the old company we had been dealing with charges us 81.00 per month for the obsolete terminal because of our contract which is not up until next year, since the equipment is not up to standard why should we be paying for it, this is a case of beware of these credit card processing companies. Any help?

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