Aloha POS magnetic cards

EMV has been promoted as "a more secure solution, " and the technology will undoubtedly serve its purpose of reducing fraud. However, this enhanced security brings some expected and unexpected outcomes - especially in the short term as consumers and business owners become familiar with the technology. In our recent post on the high-level operational impacts of EMV adoption, we addressed how EMV requirements such as a customer-present payment can impact your restaurant. Here, we're going to further explore these operational impacts, as two points of differentiation for restaurant owners - the guest experience and speed-of-service - are about to change.

Your EMV Recap

Let's start with what EMV means for your restaurant. On Oct. 1, a liability shift (note: liability shift, not a mandate) occurs around a new type of payment transaction: EMV, which stands for Europay, Mastercard and Visa, the creators of the new transaction guidelines. EMV-compliant cards also are referred to as "chip credit cards" in reference to the smart-chip technology.

All EMV-compliant cards come equipped with a microprocessor chip that generates a unique transaction ID for each use. This makes the cards more secure than their magnetic stripe counterparts and virtually impossible to duplicate. Magnetic stripe cards will continue to work after Oct. 1. However, if your restaurant does not support EMV transactions, it becomes responsible for fraudulent transactions made in your restaurant using a fraudulent EMV card.

For a more in-depth refresh on EMV, click here or read our EMV Myths Debunked blog series in which we tackle the leading myths around the Oct. 1 liability shift.

Understanding Chip & Signature vs. Chip & PIN

EMV micro-chipped "smartcards" standards are applied in two ways: chip-and-signature and chip-and-PIN. While chip-and-PIN is the standard for much of the world, the U.S. will be implementing chip-and-signature . It's important to note the differences between these two standards.

Chip-and-PIN EMV cards, which account for about 60 percent of EMV cards worldwide, require the cardholder to enter a four-digit personal identification number (PIN) to complete a transaction. Chip-and-signature EMV cards, on the other hand, require the cardholder's signature to verify the sale.

All EMV transactions begin the same way at a payment terminal device. Instead of sliding the card through a cardreader, as is done with magnetic stripe-equipped cards, the EMV card is "dipped" into the reader, which collects account data from the embedded microchip.