What Every Owner Should Know About Restaurant Insurance
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Common in Europe for over a decade now, EMV technology has only just become a popular payment form in the United States. More and more people are using credit cards as a main form of payment because of their ease of use and their continued advancements in preventing fraud. Cards with magnetic strips are more susceptible to fraud and payment forms that require a signature are becoming outdated because not many patrons take the signature seriously anyway. Cash payments are becoming less common because frictionless payments often require less time spent at the register. Whether you own a small café or a big chain restaurant, EMV technology will be impacting the way your customers interact with your business this year.
Unlike swiping a card and then entering a PIN number or signature, the EMV chip reader is inserted into the payment terminal where technology reads the chip. The chip authenticates the transaction and the banking information on it is encrypted, unlike cards with only a magnetic strip. Encryption, which converts data from the card into code, works very well in preventing fraud — one of the main reasons why main credit card companies such as Mastercard, American Express and Visa have been issuing out cards with a chip.
Today’s consumers live in the same fast-paced world that merchants live in. They want to make a quick, nearly effortless purchase and leave feeling happy with that purchase as well as with their experience. With the rise in technology, payment options are expanding. Consumers have a range of choices at the register: credit, debit, cash, digital wallet. In order to keep up with customer needs and consumer trends, your business should be implementing a variety of payment methods.
Not only will your guests enjoy the feeling of being understood, but you also might see an increase in sales and foot traffic. Whether it’s a regular diner pleasantly surprised by the new payment forms you offer, or a new customer looking for a quick bite to eat with an equally quick transaction, people are bound to talk. If your restaurant offers mobile payments, those who prefer things such as Apple or Google pay might start considering stopping by more frequently because they know your restaurant or café is an option when they’re on a quick lunch break or they don’t want to worry about taking their wallet somewhere.
Some new hardware is equipped with mobile scanning and chip reading technology. Many payment processors are creating hardware that has both options because they know not all of your customers will be paying the same way and one machine beats two when it comes to counter space and saving money.
One of the reasons restaurants and other businesses have been slow to make the change to EMV technology is because of cost. They may fear that the cost of buying all new hardware will be pricey for them, but in reality, it will save them money in the long run.
Credit card machines can range from $200 to $1000, with additional fees for processing transactions. If your restaurant only has the terminals that have magnetic stripe readers, you might want to consider investing in those that have chip readers. EMV technology is becoming increasingly secure and banks are issuing out cards with chip technology to promote the use of them. Luckily, many new payment terminals that accept the chip-enabled cards also come equipped with Near Field Communication. This is a type of contactless communication between something like a tablet and a mobile phone that allows customers to pay with their digital wallets.
Keep in mind that fees can get hefty. The new EMV and NFC technology is efficient and useful, but in order to be able to conduct transactions with credit cards and mobile phones, your restaurant must be PCI compliant. Depending on the size of your restaurant, the fees for that range from $1,000 to over $50,000 annually. On top of that, processing rates, batch fees and interchange fees all must be paid in order to finalize transactions. Do your research when you’re looking into the right credit card processing terminal for your restaurant and you’ll be able to avoid unnecessary fees.
Whether your business runs on to-go orders or sit-down meals, front-of-house and back-of-house communication is crucial in terms of getting orders right and keeping customers happy. Point-of-service systems that are outdated or unreliable can often cause confusion among the staff and frustration for customers waiting for their bills. Sometimes the magnetic stripe reader won’t work and you have to enter the card number and information manually, or the network connection malfunctions and you can’t send an order through the POS let alone printing a receipt. An easy, speedy solution to this would be having the technology to allow your customers to pay via digital wallet or chip reader in a payment processing terminal that is portable.
Around 80 percent of businesses reported an increase in sales when they implemented a mobile POS system. Why? Wait staff and kitchen employees had stronger, more efficient communication and it was easier for servers to upsell certain dishes and drinks based on what the customer ordered.
When the bill is ready, it’s as simple as inserting your customer’s card or having them dip their mobile phone to authenticate a transaction. The mobility of modern POS systems also tells customers that you understand they have other places to be and don’t want to sit around waiting for a bill to get to the table.
With all the payment options out there, it’s easy for customers to feel uneasy when it comes to payments that involve their personal banking information. Like we mentioned earlier, signatures are used less often to verify payments, and now magnetic stripe readers are being used less because of heightened fraud. EMV chips are encrypted and use digital data to shield personal information.
Because of the shift toward EMV implementation at businesses all around the United States, there has likewise been a shift in liability. Since October 2015, businesses that have not switched to EMV technology are now the parties liable for fraud that occurs on their POS systems.
When you’re weighing your options, make sure to look into all the terminals that are available for the type and amount of business you do. Education is the key to understanding how to avoid high processing fees and how to relate to your customers. You’ll save time and remove unnecessary stress from conducting business with customers who are in a hurry or prefer to pay a certain way. For more information, watch SevenRooms’ webinar on how to attract more customers to your restaurant in the digital age.