EMV Liability Shift Info for QSR Operators

Recent headlines about data breaches and credit card fraud have only reinforced what has been a troubling fact for a long time: traditional credit card transactions contain vital personal data that are targets for theft. In the United States alone, the cost of credit card fraud will top an estimated $10 billion in 2015. One measure taken by QSR and Fast Casual restaurants to control these costs is to step up their use of EMV cards with their restaurant POS in preparation of the EMV liability shift. If you haven’t seen one from your own credit card company, expect to get one soon.

WAND EMV TerminalEMV cards (“chip cards”) were designed to reduce fraud associated with these transactions. EMV involves using secret cryptographic keys and chip-card capable point of sale (POS) terminals to authenticate credit and debit card transactions. Because EMV supported restaurant POS terminals encrypt the transaction information before transmitting, the information is never stored in unencrypted form at the terminal and the risk of fraud is eliminated.

When implemented with PIN for cardholder verification, EMV limits the risk of lost/stolen/never-received fraud. In countries where EMV has been deployed, there has been a measurable and significant reduction in face-to-face fraud.

Counterfeit Card Liability Shift
Currently, when a criminal makes a purchase with a counterfeit card, the credit card issuer assumes liability (or cost). To encourage the use of EMV technology, the liability for fraudulent transactions made with EMV-compliant cards on non-EMV compliant devices (old magnetic strip reader), will shift to the merchant. After October 2015, if your restaurant accepts a fraudulent transaction paid with a chip card on a non-EMV compliant device your business may have to pay for the fraudulent purchase. To protect your business against this liability, you need to install EMV compliant devices.

What the “Liability Shift” Means to You
Since a typical ring-in at the register of a QSR restaurant is below $25, the actual money risk of accepting a counterfeit card is pretty low. Instead you run the greater risk of making headlines for being targeted by hackers who could gain access to financial information stored in your POS system. Equally unappealing is the prospect of getting in a dispute with your credit card provider over fraudulent transactions. In fact, in another attempt to control the costs of security breaches, many banks may impose fines or fees in the event of fraudulent transactions accepted on non-EMV systems

Benefits of EMV Compliance Devices
The bottom line is you want to avoid this liability in your restaurants and the easiest way to do this is to install an EMV compliant restaurant POS. When you do this you will:
• Eliminate your liability in the event of a fraudulent transaction made with an EMV card, after October 15, 2015.
• Reduce your risk of having your transaction data being hacked and the associated damage to your brand.
• Reduce the risk of financial penalties levied by credit card issuers if you continue to accept payments on a non-EMV terminal or register with Magnetic Stripe Reader (MSR).