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being readable. Tokenization eliminates the need to refer to a
customer card number for returns, voids, card on file, and recurring
transactions. Both E3 and tokenization combine with EMV to
provide optimal transactions.
How Are EMV Transactions Authorized?
EMV transactions can be authorized online and offline. EMV
transactions authorized online are verified though an online
connection from the merchant’s terminal or point-of-sale system to
card issuers, via an acquirer like Heartland Payment Systems. This
process is much like today’s magnetic stripe-based transactions in
the U.S., where transactions are authorized online. EMV offline
transactions are authorized through authentication of the card and
the merchant EMV acceptance device (point of sale or terminal).
MasterCard and Discover have announced their support for offline
authorization, but Visa does not support offline authorization for
U.S.-issued chip cards. Chances are that your transactions will be
authorized in an online mode and you will not need to be concerned
about offline authorization.
Tip Management with EMV
While EMV dual message transactions will still allow tip
adjustments when used as a “chip and PIN,” restaurants will want
to streamline EMV card acceptance. Operationally, the following
might be a best practice:
•
When an EMV card is tendered and a PIN is required, it is a best
practice to include the tip during the transaction.
•
When an EMV card is tendered and signature is requested, the
customer can sign the receipt and tip is added later.
•
In the event that the customer card tendered only supports PIN
and the restaurant only supports “chip and signature” or no
customer verification method, restaurants may ask for another
form of tender.
How Are Cardholders Verified?
Use of PIN is a common EMV cardholder verification method (CVM)
that authenticates the cardholder and protects against the merchant’s
acceptance of a lost or stolen card. When a cardholder’s pin is
used to validate who they say they are, it is called “chip and PIN.”
In addition to chip and PIN, other customer verification methods
include signature verification and no customer verification, which
is used today at some quick service restaurants. The U.S. will most
likely migrate to “chip and choice,” which indicates PIN, signature
and no customer verification method. Selection of other appropriate
customer verification methods will depend on how customers pay
for goods and services at your location today, speed of checkout,
customer convenience, and the need for chargeback protection, as
well as the restaurant’s terminal or POS system’s capabilities.
Customer Convenient Payment
The following are pay-at-the-table considerations for restaurants
implementing EMV:
What Is the Technology Innovation
Program (TIP) and Does It Apply to Me?
Effective October 2012, Visa’s TIP provides qualifying merchants—
Level 1 and Level 2 merchants that process more than 1 million
Visa transactions annually—PCI audit relief when 75% of the
merchant’s Visa transactions originate at a dual-interface EMV
chip-enabled terminal. However, all merchants must continue to
comply with PCI DSS. MasterCard offers a similar program to Visa.
It is important to note that whether you are a Level 1 merchant
processing more than 1 million transactions a year, or a restaurant
processing 10,000 transactions annually, you are still responsible
for being PCI compliant.
Questions?
If you have questions about EMV, lowering your cost of payments, how
to better manage your store network, improving transaction security,
payroll management or anything related to payment processing, please
reach out to us a
CHIP AND SIGNATURE
n
Follows current payment process
n
Minimal expense
STAND-BESIDE
PAYMENT
n
Purpose-built unit with EMV and NFC
n
Wallet acceptance
n
Stand-beside or semi-integrated
KIOSK AT THE TABLE
n
Requires iPad or Android at each table with
enclosure and readers
n
Power, battery life and security are concerns
PURPOSE-BUILT
MOBILE
n
Smartphone and sled, which is a cover encasing
the smartphone to provide payment acceptance
n
Integrated with POS system or stand-beside
MOBILE DEVICE
FOR ORDERING
AND PAYMENT
n
Smartphone and sled
n
Integrated with POS system
