The Truth about EMV in the Hospitality Industry (Part 2)
Today’s post is the second 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, “How does EMV affect your business?” You can read part one, here.
How will this affect the hospitality industry?
The hospitality industry only accounts for 9% of counterfeit card fraud. The reason for this is that the risks of using a fake credit card in person are high, so fraudsters will generally target big box retailers, buy the most expensive TV in the store, and then go sell it online. Taking that risk just to get a free lunch or dinner, by comparison, is a foolish risk, which is why the hospitality industry accounts for a disproportionately low percentage of the total brick and mortar fraud.
What does Point-to-Point Encryption have to do with EMV?
Point to Point Encryption (P2PE) has been around for at least half a decade, and will all but eliminate the types of PCI compromises you hear about today. The way it works is that the card swiper immediately encrypts the sensitive credit card data before it sends it to the POS system. So your POS system never has access to sensitive data, and thus you are virtually 100% protected from a PCI breach. Although this protects the merchant AND consumer far better than EMV, the card brands never really pushed it because it wasn’t to their benefit. As you can see by all the hype surrounding EMV, the card brands can get the message out when it’s their money on the line, but don’t really care about advancing technology that would truly protect the merchant and consumer.
What is the ROI when implementing EMV?
Based on industry data, the average restaurant can expect to see 1-2 counterfeit cards per year. So you need to contrast the loss on 1-2 meals versus the investment that the card brands are asking you to make by purchasing hundreds, if not thousands, of dollars of EMV equipment – only to serve the interests of the credit card brands. Once again, the billion dollar credit card corporations are using their leverage to take money out of the working man’s pocket!
Written by John Giles, President, Future POS, Inc.