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National Restaurant Association - EMV: Myths and facts

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EMV: Myths and facts

Starting Oct. 1, restaurants and other merchants that have not installed readers to accept new chip, or EMV, cards will be liable for chargebacks by their card companies if a purchase is made using a counterfeit debit or credit card. The EMV transition can be confusing for both merchants and guests. As your restaurant decides whether and when to transition to an EMV-enabled system, here are some myths and facts to consider.

Myth: The law requires merchants to install EMV terminals.

Fact: There’s no legal or regulatory requirement for merchants to install EMV readers or take action by Oct. 1. As of Oct. 1, the card brands have simply modified their contracts to penalize merchants who choose not to implement the technology – and penalties happen only if a merchant is defrauded through the use of counterfeit or stolen cards. It’s a business decision each company must make. Read more here.

Myth: It makes sense for restaurants to implement EMV because there’s a lot of fraudulent credit card use in restaurants.

Fact: Criminals typically haven’t targeted restaurants with counterfeit cards. Counterfeit cards have primarily been a problem for high-end retailers, electronic stores and other retailers, where criminals use counterfeit cards to buy high-end goods and resell them on the black market for a quick and easy profit. If your restaurant hasn’t had a big problem with counterfeit cards, you may not need to make a change to EMV. If you see a growing problem after the October 2015 liability shift, you may want to reevaluate.

Myth: EMV will protect your restaurant from data breaches.

Fact: EMV doesn’t change the way a customer’s transaction is processed. It only validates that the card presented for payment is, in fact, a legitimate card rather than a counterfeit. The back-end processing remains the same. The card number will still be sent unencrypted and is still susceptible to hacking. To protect your restaurant from data breaches, the National Restaurant Association encourages operators to look into encryption and tokenization technologies. The NRA considers these technologies far more important for restaurants than EMV. Encryption immediately encrypts card data as it’s entered into a point-of-sale system, so it’s unintelligible even if it gets stolen. Tokenization replaces stored card data with “tokens.” These tokens are unusable by hackers and have no value.

Myth: EMV will reduce your restaurant’s interchange, or swipe, fees.

Fact: Neither card brands nor issuing banks have given any indication that they will offer interchange-fee relief to merchants that adopt EMV. 

Myth: Merchants that implement EMV don’t need to comply with PCI standards.

Fact: EMV technology does not relieve you of any Payment Card Industry (PCI) data security requirements, and does not reduce the scope of your PCI compliance obligations. As noted above, card numbers in EMV transactions are still sent unencrypted and thus remain susceptible to hacking. So you must continue to implement PCI security controls in order to protect the credit card. Note: You can reduce the scope of your PCI obligations if you implement encryption and tokenization technologies since both render card numbers unusable.

Myth: If you don’t implement EMV in your restaurant, you won’t be able to accept credit cards after Oct. 1, 2015.

Fact: EMV cards issued in the United States will continue to carry the magnetic stripe. So even if you haven’t installed an EMV reader, you can still continue to take and process card payments just as you always have.

Myth: EMV is the same as “chip + PIN.”

Fact: EMV cards are currently being rolled out in the United States only as “chip” cards, rather than “chip + PIN.”  The U.S. cards differ from the EMV cards issued in Europe and Canada, which use “chip + PIN” technology and require customers to use a PIN at the point of sale instead of a signature. The chip + PIN approach gives merchants a second layer of authentication and reduces the likelihood that a thief will be able to use a stolen card.

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