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  • Chip Cards - Brutal For Bars

    • 08/28/2016
    • ADB
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    Imagine any bar in any city on a crowded Saturday night. The overworked bar tender scrambles to fill pint glasses of Bud Light and concoct basic mixed drinks for thirsty customers. After grabbing patrons’ credit or debit cards, the bar keep or server typically swipes the magstripe (the magnetic stripe on the back of a credit or debit card) to open the tab and hurriedly punches orders into the POS. It is such an easy and automatic procedure that repetition of this seamless process over the years has allowed the bartender to bounce in a trance-like flow from the tap to the liquor shelf to the bar, filling up drink orders in the same routine and keeping the bar running efficiently.

    But with the imminent adoption of EMV chip credit card readers, bartenders everywhere, along with several thousand others across the nation, will find themselves stumbling over the new credit card readers’ time-consuming nuisances.

    Essentially, because of the time consuming chip, every couple of seconds that gets tacked on is another drink you can’t get served. It is money lost due to delay.

    Over the past year, the rollout of EMV chip card readers in the United States has, to echo the words of experts in the field, been hell. EMV chip card readers, named after EuroPay, MasterCard, and Visa, the three companies that originally created the standard payment method, were designed to improve security to reduce fraudulent charges. Although they have been the standard method of plastic payment in Europe and Canada for more than a decade, card holders in America are just beginning to recognize their existence…and the headaches.

    Across the States, a weakly enforced push to transition to using EMV cards properly came last year when a liability shift was announced from the credit card processors to the companies, incentivizing business owners to start using EMV card terminals as part of the payment method. But despite the shift, in the bar industry these new readers are rather non-existent, and for good reason. And their eventual introduction might just compound a service nightmare.

    Until the introduction of EMV chip cards, credit and debit card users typically had their cards’ magstripes swiped at a processing terminal. This would relay the customer’s card data (their account number, their name, and the card’s expiration date), to the credit card processor, which approves or declines the transaction. The problem with the traditional card payment method is that “there is no validation performed on the card, so it’s not especially challenging for someone with malicious intent to create a fraudulent card from that information.”

    With EMV cards, the card’s chip uses encrypted data to produce a unique set of data for each transaction. As a result, when the chip is properly stuck into a specialized terminal for an EMV card, the transaction data is relayed to the credit card processor, which verifies the data and then either approves or declines the transaction.

    Now that the switchover has begun, while business owners are not forced to purchase and use specialized EMV card terminals, any time a customer swiped the magstripes of cards with EMV chips instead of inserting the chips into an EMV reader the bars were now liable for the fraudulent claims.

    Despite the looming threat of having to eat the cost of a fraudulent charge, EMV card terminals in bars are nowhere to be seen. Several companies have invested thousands of dollars into their POS systems. Many of these systems, have yet to introduce mechanisms for the EMV cards that are adaptable to the POS system. As a result, rather than utilizing the current EMV card terminals, several bar owners have decided to risk eating fraudulent charges and continue to use the old fashioned magstripe payment processing method. That attitude could change if enough fraudulent charges have to be covered by the owners.

    The US Merchant Payment however, noted that by not using EMV card terminals, customers who know how to play the system can become a bar’s worst nightmare. If a knowledgeable patron decides to run up a high tab and then, after seeing his or her card swiped, calls up the company and claims the charges on a card with an EMV chip were fraudulent, the business will have to eat the losses. Imagine over the course of a month that 300 customers each dispute charges, unjustifiably, on a $30 claim. That’s $9,000 set aflame for simply not having the proper equipment.

    A tentative problem with EMV terminals is that bartenders will no longer be able to open tabs and will have to write tabs on pen and paper. Bartenders can still open tabs on POS systems and then run the EMV credit card in the proper card reader. That is not to say, however, that this is a totally efficient idea.

    More likely than not, when the EMV terminals finally hit bars and restaurants, bartenders will have to run tabs on the POS akin to how they currently run a tab for regulars, but with a few more steps. Rather than swiping the magstripe to collect the customer’s info, the bartenders will manually have to type in the name to open the tab — a total migraine starter if you’ve got 150 heads to serve in one night — and will continuously add to the tab as the orders increase. And when the customer wants to close out, the bartender then will have to dig through the stacks to figure out which card is a particular customer’s, let them know the total amount, insert the card, wait for the EMV card reader to transmit the bill to the credit card processor, and have the customer finally sign the receipt.

    The most common complaint regarding these back end issues, however, is the final step of closing: the tip has to be included before the bartender runs the final total on the card.

    American Bars notes that, at a 300 customers at a night blues bar, that’s going to cause sever problems, amounting to an awful waste of time to make an extra drink or pour another beer to close things down as every four cards adds up to a minute.

    Certainly more discussion will come…

     
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Chip Cards - Brutal For Bars

 

Imagine any bar in any city on a crowded Saturday night. The overworked bar tender scrambles to fill pint glasses of Bud Light and concoct basic mixed drinks for thirsty customers. After grabbing patrons’ credit or debit cards, the bar keep or server typically swipes the magstripe (the magnetic stripe on the back of a credit or debit card) to open the tab and hurriedly punches orders into the POS. It is such an easy and automatic procedure that repetition of this seamless process over the years has allowed the bartender to bounce in a trance-like flow from the tap to the liquor shelf to the bar, filling up drink orders in the same routine and keeping the bar running efficiently.

But with the imminent adoption of EMV chip credit card readers, bartenders everywhere, along with several thousand others across the nation, will find themselves stumbling over the new credit card readers’ time-consuming nuisances.

Essentially, because of the time consuming chip, every couple of seconds that gets tacked on is another drink you can’t get served. It is money lost due to delay.

Over the past year, the rollout of EMV chip card readers in the United States has, to echo the words of experts in the field, been hell. EMV chip card readers, named after EuroPay, MasterCard, and Visa, the three companies that originally created the standard payment method, were designed to improve security to reduce fraudulent charges. Although they have been the standard method of plastic payment in Europe and Canada for more than a decade, card holders in America are just beginning to recognize their existence…and the headaches.

Across the States, a weakly enforced push to transition to using EMV cards properly came last year when a liability shift was announced from the credit card processors to the companies, incentivizing business owners to start using EMV card terminals as part of the payment method. But despite the shift, in the bar industry these new readers are rather non-existent, and for good reason. And their eventual introduction might just compound a service nightmare.

Until the introduction of EMV chip cards, credit and debit card users typically had their cards’ magstripes swiped at a processing terminal. This would relay the customer’s card data (their account number, their name, and the card’s expiration date), to the credit card processor, which approves or declines the transaction. The problem with the traditional card payment method is that “there is no validation performed on the card, so it’s not especially challenging for someone with malicious intent to create a fraudulent card from that information.”

With EMV cards, the card’s chip uses encrypted data to produce a unique set of data for each transaction. As a result, when the chip is properly stuck into a specialized terminal for an EMV card, the transaction data is relayed to the credit card processor, which verifies the data and then either approves or declines the transaction.

Now that the switchover has begun, while business owners are not forced to purchase and use specialized EMV card terminals, any time a customer swiped the magstripes of cards with EMV chips instead of inserting the chips into an EMV reader the bars were now liable for the fraudulent claims.

Despite the looming threat of having to eat the cost of a fraudulent charge, EMV card terminals in bars are nowhere to be seen. Several companies have invested thousands of dollars into their POS systems. Many of these systems, have yet to introduce mechanisms for the EMV cards that are adaptable to the POS system. As a result, rather than utilizing the current EMV card terminals, several bar owners have decided to risk eating fraudulent charges and continue to use the old fashioned magstripe payment processing method. That attitude could change if enough fraudulent charges have to be covered by the owners.

The US Merchant Payment however, noted that by not using EMV card terminals, customers who know how to play the system can become a bar’s worst nightmare. If a knowledgeable patron decides to run up a high tab and then, after seeing his or her card swiped, calls up the company and claims the charges on a card with an EMV chip were fraudulent, the business will have to eat the losses. Imagine over the course of a month that 300 customers each dispute charges, unjustifiably, on a $30 claim. That’s $9,000 set aflame for simply not having the proper equipment.

A tentative problem with EMV terminals is that bartenders will no longer be able to open tabs and will have to write tabs on pen and paper. Bartenders can still open tabs on POS systems and then run the EMV credit card in the proper card reader. That is not to say, however, that this is a totally efficient idea.

More likely than not, when the EMV terminals finally hit bars and restaurants, bartenders will have to run tabs on the POS akin to how they currently run a tab for regulars, but with a few more steps. Rather than swiping the magstripe to collect the customer’s info, the bartenders will manually have to type in the name to open the tab — a total migraine starter if you’ve got 150 heads to serve in one night — and will continuously add to the tab as the orders increase. And when the customer wants to close out, the bartender then will have to dig through the stacks to figure out which card is a particular customer’s, let them know the total amount, insert the card, wait for the EMV card reader to transmit the bill to the credit card processor, and have the customer finally sign the receipt.

The most common complaint regarding these back end issues, however, is the final step of closing: the tip has to be included before the bartender runs the final total on the card.

American Bars notes that, at a 300 customers at a night blues bar, that’s going to cause sever problems, amounting to an awful waste of time to make an extra drink or pour another beer to close things down as every four cards adds up to a minute.

Certainly more discussion will come…

 
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