The Truth about EMV in the Hospitality Industry (Part I)

Today’s post is the first in a two part series discussing EMV technology and the hospitality industry. John Giles, President, Future POS, Inc., answers the your pressing questions on changing compliance standards and the implementation of EMV in the United States, beginning in October of 2015. Today’s post answers the question, “What is EMV?”

Does EMV protect the merchant?

EMV is 30-year-old technology which is designed to protect the card brands (MC, Visa, Amex, Discover), and offers no real protection to the merchant or consumer. Its sole purpose is to verify that the card being used is legitimate, and not a counterfeit card produced with the intention to defraud.

Does EMV prevent fraud?

Where EMV has been implemented in markets such as Europe, credit card experts will tell you quotes like “brick and mortar fraud has dropped to virtually zero.” What they fail to mention is that online and card not present fraud goes through the roof. So for all the effort and expense involved in implementing EMV, all it really accomplishes is to shift fraud from one source to another.

Does EMV reduce credit card rates?

EMV will greatly limit your options with regards to credit card processors, as each EMV “chain” has to be certified separately, which is reportedly a six month process. Meaning that each credit card processor, working with every POS company must certify every POS EMV device that is to be used.

Obviously, if you do the math, this is far too many certifications to occur in a realistic timeframe, so less “important” processors will get locked out of EMV entirely. This means fewer EMV options, thus less competition, resulting in higher credit card rates for merchants. The certification bottleneck will have the unintended consequence of creating a monopoly for larger processors who can throw their weight around to get to the front of the EMV certification line.

Keep watching for part two of this series which answers the question, “How does EMV affect your business?”

Written by John Giles, President, Future POS, Inc.