The Future of Payments

Traditionally, restaurants have had three ways to accept payments: cash, credit card, and debit card. Changes are coming to the payment industry through the creation of mobile payment methods such as Apple Pay, Google Wallet, PayPal, NFC, 1D and 2D barcodes; not to mention the new integrated circuit cards  (IC cards or “chip cards”) for use with EMV.

EMV stands for Europay, MasterCard and Visa, a global standard for inter-operation of IC cards and IC card capable POS terminals & ATMs for authenticating credit and debit card transactions.

Chip cards are quickly becoming the new form of credit card, already in use throughout Europe, Canada, Asia Pacific, Middle East, and Africa. Issuers are shifting from magnetic swipe cards to chip cards to increase security and reduce fraud resulting from counterfeit and lost & stolen cards, thus lowering the annual $5 billion loss in credit card fraud.  The supposed increased protection from fraud has allowed banks and credit card issuers to push through a ‘liability shift’ such that merchants will now be liable for any fraud that results from transactions on systems that are not EMV capable.

The credit card issuing giants (MasterCard, Visa, American Express, and Discover) have given October 15, 2015 as the deadline for U.S. businesses to switch to EMV compliant POS terminals, or else be liable for the losses via fraud.  Additionally, no-cost mini-card readers like Square will need to be replaced (for a fee), to read the new EMV encrypted cards. Restaurants need to be prepared to accept these new credit cards.

Meanwhile, the recent hype about other new ways to pay through a smartphone such as Apple Pay and Google Wallet has introduced Near Field Communications (NFC), in other words, contactless communication between devices like smartphones and tablets.  The payment application residing on the mobile device is in many cases an enhanced version of a market-proven payment application residing on millions of EMV cards today. Although still gaining traction, more consumers are adopting these NFC technologies.

Changes to the payment world are fast approaching.  Restaurants who take a wait and see attitude will fall behind. But more at risk is potential loss merchants face if/when any fraudulent transaction comes to their establishment and they are unable or unwilling to process EMV transactions correctly.

The best way for restaurants to be ready for all the upcoming changes is to  “Future Proof” their payment processing and ensure they are ready to accept these new payments as well as be prepared for any new compliance mandates and technologies that enter the marketplace.  Restaurants should work with their local POS Dealer to discuss having the right software in place like Restaurant Manager’s NETePay Gateway. Also, you local dealer are now offering these services with  “Enhanced Service Plans”, which ensure that restaurants are ready for  whatever any type of payment consumers what to utilize.

Author: Remigijus Pavydis