The ABCs of EMV

October 24, 2017 Tiffany Regaudie


It’s been more than two years since the EMV liability shift in the United States, meaning that banks and payment processors are now able to hold your restaurant liable for fraudulent credit card charges if you don't properly secure your venue to support EMV cards. While EMV compliance is not required by law, your restaurant may now be on the hook if certain types of in-person fraud take place at your business.


But businesses haven’t been the most enthusiastic about EMV compliance: since October 1, 2015, when the EMV liability shift took place, only one third of U.S. businesses have become EMV compliant – even though 65% of credit cards were issued with chips. Because of the slow adoption of EMV implementation, Visa, Mastercard, and American Express have postponed the full enforcement of liability until April 2018 – which is good news if your restaurant isn’t EMV compliant!


So now’s your chance to become EMV compliant before the enforcement date. Here’s what you need to know about EMV chip compliance for restaurants.




Named after its original developers (Europay, Mastercard, and Visa), EMV technology enables debit cards and credit cards with embedded microprocessor chips that store and protect the cardholder’s data. The goal is to replace “magstripe” cards that are more vulnerable to fraud.


Also known as “chip and PIN” or “smart cards”, EMV-compliant payment cards are processed through an updated POS system and payment processor – but your restaurant can still accommodate magstripe cards after upgrading.




Believe it or not, the U.S. is the world’s last major market to become EMV compliant. The goal of EMV compliance standards is to encourage banks and businesses to implement new technology that more effectively protects consumers from credit card and debit fraud.


Countries that have adopted EMV technology have reported a significant drop in card fraud compared to using magnetic strips. According to Kiosk Marketplace:


  • In the European Union, credit card fraud dropped by 80%

  • In Canada, earnings Before Interest & Tax (EBIT) losses dropped by 73% 

  • In France, counterfeit card fraud dropped by 91%




Before the October 1, 2015 cut off, if a customer came into your venue and racked up a hefty bill using a fraudulent card, the bank would have absorbed the cost. Now, if you’re not EMV compliant with a chip card reader, you’ll be liable for the losses from fraudulent charges and will be required to pay out of pocket.


But some restaurateurs have since chosen not to become EMV compliant for one reason: the chargebacks and fines from credit card companies were in some cases less than the cost to meet the liability shift’s requirements. Also, according to Hospitality Technology, “in clear violation of PCIDSS standards, some retailers and restaurateurs are storing the very Track 2 card data that PCI and EMV was supposed to protect. They are doing this in order to maintain an audit trail in an effort to contest the increasingly fraudulent chargeback activity.”


So it’s clear some restaurants have been fighting against the EMV liability shift in ways that aren’t the most ethical. But guess what? If you own a restaurant with one or only a few locations, the cost of EMV compliance is worth making sure you’re treating customer data with care.


The “chip it” shift is happening on the consumer side whether restaurants like it or not, meaning that diners are coming to expect the experience of paying for meals with their debit and credit chip cards. According to Mobile Payments Today, “The U.S. Payments Forum estimates that as of late March [2017], banks (as well as American Express and Discover) had issued some 600 million chip cards.”






The process of “how to chip” requires an update to your POS system and your payment processor. Here’s how you can become EMV compliant:



1. Update Your Payment Processor

Check in with your credit card acquirer, processor, and bank about what you need to upgrade and how much it will cost. You’ll need an EMV-compliant chip card reader to begin accepting “chip and PIN” or “chip and signature” payments. 



2. Update Your POS System

To make sure you’re EMV compliant, start with your POS. Depending on your POS system, you may need to purchase an upgrade, call a technician to update the system for you, or it may be as simple as updating some software.


Pro tip: TouchBistro iPad POS has recently announced TouchBistro Payments! TouchBistro Payments is a partnership with Chase that brings restaurants integrated payments, which allows your restaurant to be ready to take integrated payments with TouchBistro as soon as your equipment arrives. Available early 2019.



3. Train Your Staff

After you upgrade, you’ll want to train your staff on how to properly use the new EMV-compliant terminals. They should be able to show your customer how to insert their chip cards into the machine and then either sign or enter their PIN to complete the transaction.

Don’t forget: Update your training manuals to include information about using EMV terminals.






About the Author

Tiffany Regaudie

Tiffany is the Content Marketing Manager at TouchBistro, where she shares knowledge with restaurateurs on how to run their business. She's passionate about traveling the world and getting to know communities through great food.

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