EMV chip technology is a hot topic these days with the October deadline just around the corner. At present, the U.S. is host to nearly half of the world’s credit card fraud. We posted an update back in June with some statistics on how the U.S is progressing with implementation. That’s just one part of the discussion around EMV technology. Another part of this discussion is the actual impact that chip cards will have on fraud and business. We took a look at two industries that will be impacted by the EMV technology with different results.
Hospitality will benefit
It seems the amount of personal information you provide at check in has become a popular target for fraud:
According to the Verizon 2015 Data Breach Investigation Report, lodging is one of the most breached industries. A recent Trustwave and SpiderLabs Global Security Report reveals more than a third (38 percent) of attacks aimed at the hotel industry. The sector comes in well ahead of the financial services industry (19 percent), retailing (14.2 percent), and restaurants and bars (13 percent).
Since 65 percent of hospitality data breaches are the result of compromised of point-of-sale (POS) devices, the EMV chip card will greatly improve security for this industry. Large hotel or small, a major security breach has the potential to damage a hotel’s reputation significantly. The damage is accelerated through widespread social media use where customers are sharing their opinions about every aspect of their experience. EMV is one small step towards demonstrating a desire to stay current as well as to protect your customers.
A potential downside for waitstaff
For years, credit cards have been swiped then adjusted to add a tip in the restaurant industry. A potential bump in the EMV chip card road is that they function in a single swipe transaction:
“Once you insert that card into a terminal and complete the transaction, you cannot go back and adjust the tip, or add one once the card has been removed,” explains Andy Goranson, president of Omaha-based processing and technology company U.S. Merchant Payment Services.
This detail could present an issue for patrons and servers alike because the tip amount must be indicated prior to swiping the card. Leaving a less than standard tip for less than acceptable service needs to be disclosed up front. Of course, tipping separately in cash is always an option. However, this issue may take some time to work itself through as chip cards become the new international standard.
The bottom line is that EMV chip cards will significantly reduce credit and debit card fraud across all industries. It seems that the benefits and reduced fraud will far outweigh any issues or temporary inconvenience. Time will tell.
Do you have an experience with EMV chip cards? How have they impacted your business? Please share your opinions in our comments below.