January 18, 2013
January 23, 2013

New credit card standards will have major effect on industry starting in 2015.

Though 2013 has just begun, restaurant operators should keep at least one eye on 2015, when new credit card standards will begin to reshape how most customers pay for goods and services.

By October 2015, all restaurants and other merchants will be subjected to new Europay, Mastercard, and Visa (EMV) standards, which reflect a shift from magnetic-stripe credit cards to chip-and-pin cards. Considered safer and widely used across Europe and other nations, the chip-based cards require insertion of the card into a terminal throughout the entire transaction. Here are some of the benefits of using credit cards:

This is going to be a change in behavior that restaurants and retailers are going to have to adapt to, as well as consumers.

EMV compliance is required for credit card acquirers and processors, though it’s not mandated for merchants and processors. But merchants who don’t meet compliance by October 2015 will assume liability for fraudulent purchases—a shift that is poised to drive many to adopt the new standards and avoid the risk.

This change does come with a share of good news for operators. First, the chip-based cards are less susceptible to fraud. U.S. adoption will also allow for increased interoperability between domestic and international markets as things move to a more global credit card standard.

The U.S. is the last bastion of the magnetic stripe.  Every other country and every other continent, with the exception of Antarctica, has moved over to EMV.

Restaurants across the country will have to review their point-of-sale systems, including in-store hardware and software. The transition could prove easier for small operations, which may be able to move to EMV by simply adding a new external pin pad. But the larger quick-serve chains will likely have to invest heavily as they look to upgrade thousands of terminals and systems.

And while the change is still a ways off, experts say the move could influence operators’ purchase of POS equipment; some may want to delay purchases planned for the next couple of years, while others will speed up their upgrades to obtain EMV compliance by the 2015 deadline.

It’s going to be different, and there is going to be an expense. Even if you have compliant devices, at some point in the future you’re still going to have some legacy elements you’re going to deal with.

We should expect to see larger merchants add EMV terminals this year as credit card companies begin to issue more chip-based cards. Then it will take time—some estimate as many as seven to 10 years—for chip-based cards to become fully integrated into the marketplace.

Source:, January 2013

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